Employment Regulations in Indonesia

Employment regulations in Indonesia have undergone recent updates to ensure better worker protection and to align with evolving labor market dynamics. Generally, they consist of various aspects starting from basic responsibilities, job safety, and even about pension plans. Employment regulation consists of many different rules that govern different aspects of work. This regulation applies from the moment an employee is hired until their working period is completed. 

What are the Employment Regulations in Indonesia?

There are several laws and statutes that regulate employment matters in Indonesia:

  1. The Manpower Law or Labor Law Number 13 of 2003, it was most recently amended in 2020 with the formulation of the Job Creation Law or Omnibus Law.
  2. Industrial Relations Dispute Settlement Law or IDRS Law Number 2 of 2004.
  3. The Employee/Labor Union Law of 2000

In 2021, certain sections of the Manpower Law amendments were proven unconstitutional. As such, the Indonesian government must address these issues within the period of 2 years. In that regard, it is important to note that new updates might arrive in the near future. 

Types of Employment in Indonesia

There are two main types of workers according to the employment regulations in Indonesia: permanent and fixed-term employees. In the case of a verbal agreement, the employer is responsible for providing the employee with an authentic appointment letter that clearly defines the timeline, expectations, and wages offered for the role. Meanwhile, the employment contract with a fixed-term employee is more strict. Employment agreements for fixed-term employees cannot include terms of a probation period. In this type of employment, verbal agreements are invalid. Furthermore, it is important to note that you can only extend the fixed-term employment contracts once. 

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Working Hours in Indonesia

According to the Manpower Law, the normal working hours in Indonesia must not exceed seven hours per day, six days per week, and in total 40 hours per week. Female employees who are pregnant with doctor’s advice cannot work between 11 p.m. to 7 a.m. Furthermore, employees are eligible to receive overtime pay after finishing their seventh or eighth hour at work. Overtime policies vary between companies but overtime hours cannot exceed 3 hours per day and 14 hours per week. Overtime pay is worth double the hourly wage of the employee. At the minimum, every employee has the right to get a thirty-minute break after at least four hours of consecutive work. Employees who work five-days a week get Saturdays and Sundays off, while six-day workers get Sundays off. 

How can Double M help?

The government created employment regulations in Indonesia to protect the worker’s rights. With Double M’s help, you will be able to comply with the employment regulations in Indonesia.