Indonesia Employment Protection Law
What employers should prepare for
By Aman HR Consulting | 8 October 2026
Indonesia’s employment landscape is entering another period of change. On 6 October 2026, the House of Representatives (DPR) approved the UU Pelindungan Ketenagakerjaan, referred to in this article as the Employment Protection Law. DPR confirmed the approval in its official announcement published the following day.[1]
For employers, the immediate priority is to understand the announced direction and identify where existing HR and payroll practices may need adjustment.
Status of this update: This article draws on official DPR and Ministry of Manpower announcements available when reviewed on 8 October 2026. We have not verified the promulgated law, its official number, effective date or transitional provisions. The review steps below are preparedness recommendations, rather than a statement that every announced provision is already enforceable.
Legislative background and timeline
DPR links the reform to Constitutional Court Decision No. 168/PUU-XXI/2023, calling for separate employment legislation and separation of employment provisions from Law No. 6 of 2023 on Job Creation.[3]
The legislative steps reported by DPR are:
Date | Development |
5 October 2026 | Commission IX and the government agreed to proceed to plenary consideration.[3] |
6 October 2026 | DPR approved the bill in plenary, as reported on 7 October.[1] |
Parliamentary approval provides the context for this update. Employers still need to check the promulgated text and commencement provisions when deciding how and when to implement changes.
What has been announced
The Ministry of Manpower (Kemnaker) describes a framework that strengthens equal treatment, extends protection to jobseekers and training participants, and responds to changing work arrangements. Its announcement specifically identifies provisions on severance reserves and the retention of diplomas and personal documents.[2]
These developments touch several stages of the employment lifecycle. Employers should therefore involve recruitment, HR, payroll, finance and operational managers in their review.
The broader scope of the reform
The committee report describes 23 chapters and 313 articles, covering workforce planning, training, informal work, foreign workers, employment relationships, wages, industrial relations, termination, severance reserves and enforcement.[3]
The review areas below provide an employer preparation checklist. When the operative text is confirmed, businesses should assess its full scope against their workforce and operating arrangements. Employers using foreign workers, apprentices or flexible engagements can include those arrangements in their policy inventory.
Review recruitment and document-handling practices
Kemnaker identifies a prohibition on retaining diplomas and personal documents during recruitment and worker placement as one of the announced provisions.[2]
A useful first step is to check whether the organisation, its recruitment agents or any placement providers hold employees’ original documents. Review recruitment forms, onboarding checklists and any employment or training arrangements that refer to document retention.
For qualification checks, consider whether inspecting an original and retaining an appropriately protected copy would meet the business need. Any return of documents should be recorded so that both parties have a clear acknowledgement.
Once the final text is available, verify the exact scope, applicable conditions and consequences before finalising policy wording. Treat document verification and document retention as separate decisions.
Prepare HR and finance for the severance-reserve provisions
The Ministry’s announcement includes a framework for severance reserves, or dana cadangan pesangon.[2]
This makes coordination between HR and finance especially useful. HR should be able to provide reliable employment dates, contractual terms and remuneration records. Finance should understand how those records support the assessment of potential termination costs and cash requirements.
As a preparatory exercise, employers can review their current severance calculations and identify where assumptions, data or approvals are unclear. Keep any scenarios for possible future changes separate from approved settlement calculations.
The sources reviewed do not establish a verified contribution rate, funding mechanism or implementation deadline. Employers should confirm these matters, together with any revised entitlement rules, against the promulgated law and relevant implementing regulations before changing payroll calculations or making deductions.
Examine equal treatment across the employment lifecycle
Kemnaker emphasises equal opportunity and nondiscrimination in recruitment, remuneration, career development and employment relationships.[2]
An employer review can start with practical questions: Are selection criteria connected to the role? Are pay decisions documented? Do managers apply promotion criteria consistently? Can employees raise concerns through a clear process?
Reviewing these decisions together helps expose inconsistencies that a policy review alone may miss. For example, a written equal-opportunity policy is less useful if recruitment forms or manager instructions apply different criteria in practice.
Record the reasons for material employment decisions and clarify who is responsible for reviewing exceptions.
Check support for women and workers with disabilities
The official announcement also highlights stronger protection for women and workers with disabilities.[2]
HR teams can prepare by checking how leave requests, supporting documents, workplace adjustments and pay treatment are handled. Payroll and HR should use consistent records so that an approved absence is processed correctly.
This is also an opportunity to assess whether managers know where to refer sensitive requests and whether employees can access the relevant procedures.
The announcement alone does not establish the detailed leave durations, payment rules or accommodation requirements. Those specifics require review against the applicable legal texts before an employer communicates a change in entitlement.
Map flexible work, training and apprenticeship arrangements
Kemnaker states that the framework extends protection to flexible work and strengthens protection for jobseekers, trainees and apprentices.[2]
Employers should map the arrangements they use, including remote or hybrid work, training placements, apprenticeships and other flexible engagements. For each arrangement, identify the agreement, supervisor, payment process, working expectations and route for raising concerns.
This mapping is a practical preparation step; it does not mean all arrangements have the same legal status. Avoid assuming that the title of an agreement settles the classification. Compare the documented arrangement with how the work operates, and obtain advice where the position is uncertain.
A practical employer action plan
Start with a focused review that produces clear ownership and a record of decisions:
Assign an update owner. Nominate someone to monitor official publication and coordinate HR, payroll, finance and management.
Create a policy inventory. Gather employment agreements, company regulations, recruitment forms, leave policies and termination procedures.
Check the underlying data. Validate employment dates, pay components and other records used in employment-related calculations.
Record the gaps. Separate current operational weaknesses from changes that depend on the new legal text.
Control implementation. Approve changes only after confirming the relevant provisions, commencement and transition rules; test any payroll-system changes before use.
Employee communication should follow the same discipline. Explain confirmed changes clearly, with the date they apply, rather than circulating broad claims that may create uncertainty about individual entitlements.
Turning regulatory change into practical readiness
An announcement is the starting point for an employer review. The next step is to translate the verified legal requirements into contracts, policies, payroll processes and manager guidance.
Preparing the records and responsibilities now will make that process easier once the operative details are confirmed.
Aman HR Consulting supports businesses in Indonesia with HR advisory, payroll administration and compliance reviews. If your organisation would like to assess its HR and payroll readiness, contact Aman through aman-hr.com.
This article provides general information based on the official announcements reviewed. Decisions about individual employment arrangements should be checked against the applicable legal text and circumstances.
Sources
[1] DPR RI, 7 October 2026, DPR Sahkan UU Pelindungan Ketenagakerjaan, Dasco: Kado Terindah untuk Buruh
[2] Ministry of Manpower, 6 October 2026, Menaker: RUU Pelindungan Ketenagakerjaan Hadirkan Era Baru Hukum Ketenagakerjaan
[3] DPR RI, 5 October 2026, Komisi IX dan Pemerintah Sepakati RUU Pelindungan Ketenagakerjaan Dibawa ke Paripurna
