On 6 October 2026, the DPR passed the Labour Protection Law (Undang-Undang tentang Pelindungan Ketenagakerjaan). It replaces the employment provisions of the Job Creation Law and, from what has been said publicly, shifts the balance back toward employees on severance, fixed-term contracts and outsourcing.
The catch is that almost nobody has seen it. More than three weeks after the vote, the text has not been released and the law has no number. Everything below comes from what the Minister of Manpower, DPR members, unions and employer groups have said in public. We will revise this article once we have read the official text.
Passed, but not yet published
The law exists because the Constitutional Court required it. In Decision No. 168/PUU-XXI/2023, delivered on 31 October 2024, the Court gave the DPR and the government two years to pass a standalone employment law, separate from Law No. 6 of 2023 on Job Creation.
The DPR passed it with a few weeks to spare. Its working committee reported that the final law runs to 23 chapters and 313 articles.
What has not happened yet is signature and promulgation. On 21 October, the Minister of Manpower said the text was still with the Ministry of State Secretariat and would be posted on JDIH once that process was complete. Unions have been pressing the President to sign. Apindo has said it will not comment on the detail until it sees the final wording.
One date worth knowing: under Article 20(5) of the 1945 Constitution, a bill the President has not signed within 30 days of joint approval becomes law anyway and must be promulgated. For this law, that date is 5 November 2026.
When does it apply?
Not yet, and not for a while. The Ministry of Manpower has said the law takes effect one year after it is promulgated, and that clock has not started.
Until then, nothing changes in practice. Law No. 13 of 2003, as amended by the Job Creation Law, still applies, together with Government Regulation No. 35 of 2021 and the other implementing regulations. Many details of the new law will also depend on implementing regulations that have yet to be drafted.
Severance and terminations
For most employers, this is where the cost sits.
Under the current rules, some termination grounds carry severance at half the statutory amount. Union leaders say this covered, among others, terminations for efficiency and bankruptcy. The Minister has said the new law drops the 0.5 multiplier, so severance will be at least the full statutory amount. “One times” here means one times the formula based on length of service, not one month’s pay.
Terminations will reportedly also be harder to carry out. The Minister said companies will no longer be able to let people go on efficiency grounds as easily as they can today. According to union leaders, the law requires employers to notify employees and negotiate before terminating, and to keep paying wages while a termination dispute is pending.
The law also provides for a severance reserve fund. How it will work is left to a government regulation.
Fixed-term contracts and outsourcing
Press reports say a PKWT will be limited to an initial two years, with no more than two extensions of up to one year each. That is four years in total, compared with five under the current rules. Union leaders have also said contract and outsourced workers will be entitled to severance.
Outsourcing is reportedly being confined to five types of support services. The reports we have seen name only cleaning so far. State-owned enterprises will have to run outsourcing through their subsidiaries.
If your Indonesian operation relies on rolling PKWT or outsources work beyond typical support functions, this is the part to look at first.
Other points
The Minister described 13 new provisions in total. Besides those above, they include a ban on holding employees’ diplomas or other personal documents during recruitment, rules on employing foreigners married to Indonesian citizens and their children, stronger protection for women workers, workers with disabilities, apprentices and job seekers, and stronger labour inspection.
How to prepare
Our advice for now is simple: do not change contracts or policies based on press reports. The final text may differ, and the law will not apply for at least a year.
What you can do now is work out where you are exposed. Check how many employees are on PKWT that would run past the reported limits, which outsourced functions might fall outside the permitted categories, and what a restructuring would cost without the 0.5 multiplier. Once the text is published, your company regulations (peraturan perusahaan) or collective labour agreement will need to be checked against it.
This article is general information on Indonesian law as at 30 October 2026. It is not legal advice, and reading it does not create a lawyer–client relationship.