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There have been several key changes to the laws and regulations relating to manpower in Indonesia between 2024 and 2025. These regulatory changes are not merely technical adjustments; they carry significant implications for both employers and employees in Indonesia.
The government of Indonesia (the "Government") through the Minister of Manpower ("MoM"), has introduced several new regulations and circulars covering key aspects of employment including workers' rights and wage subsidies, the development of a digital employment ecosystem and the expansion of social security programmes. These measures illustrate a clear policy direction of promoting flexibility and efficiency in employment while reinforcing safeguards for workers, and at the same time enhancing transparency and accessibility in manpower administration. Some of these major new rules are provided as follows.
Prohibition of Discrimination During Recruitment
The MoM has issued Circular Letter of the MoM No M/5/HK.04.00/V/2025 on the Prohibition of Withholding Diplomas and/or Personal Documents of Workers (the "Circular Letter"). The issuance of this Circular Letter marks significant steps of the MoM toward enforcing Article 5 and 6 of Law No 13 of 2003 on Manpower as lastly amended by the Law No 6 of 2023 on the enactment of Government Regulation in Lieu of Law No 2 of 2022 on the Stipulation of Job Creation as Laws (the "Manpower Law"), stating that every employee shall have equal opportunity to obtain work and shall not be subject to discrimination by employers.
Several points have been included in this Circular Letter, such as the following.
- Employers are strictly prohibited from requiring or withholding diplomas and/or personal documents of workers as a condition of employment. Personal documents include, among others, competency certificates, passports, birth certificates, marriage certificates and vehicle registration documents.
- Employers are prohibited from obstructing or preventing workers from seeking or obtaining better employment opportunities.
- Prospective workers are advised to carefully review the terms of their employment agreements, particularly where provisions require the submission of diplomas and/or personal documents as a condition of employment.
- In exceptional cases where the temporary submission of diplomas or competency certificates is legally justified, such practice is only permissible if:
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- the diploma or competency certificate was obtained through education or training financed by the employer under a written employment agreement; or
- the employer must guarantee the security of the documents and provide compensation in the event of damage or loss.
Implementation of Government-Funded Salary/Wage Subsidies
Indonesia previously introduced Government-funded wage subsidies through MoM Regulation No 10 of 2022 on Guidelines for the Provision of Government Assistance in the Form of Wage Subsidies for Workers. However, this regulation is no longer up to date and requires a recalculation of the subsidies.
By way of background, Indonesia applies region-based minimum wage provisions, with some cities setting lower wages. This raise concerns over widening disparities among workers, particularly given the rising cost of living in Indonesia.
To avoid these issues, the MoM has now amended this regulation by issuing MoM Regulation No 5 of 2025 ("MoM Reg 5/2025"). The amendments introduced under MoM Reg 5/2025 primarily focus on revising the eligibility criteria for workers entitled to receive the Wage Subsidy (Bantuan Subsidi Upah or BSU), as well as the distribution scheme governing the disbursement of the BSU. Within the issuance of this new regulation, the Government will provide an additional subsidy amounting to IDR600,000 paid in a lump sum valid for a duration of two months to Indonesian citizens who earn less than or equal to IDR3.5 million (or less than their region's minimum wage if such minimum wage provisions is higher than IDR3.5 million) per month. Such citizens must also hold active participation in the Manpower Social Security Programme known as BPJS (Badan Penyelenggara Jaminan Sosial) and be registered with a Citizen Identification Number (Nomor Induk Kependudukan or NIK). In this regard, the Indonesian citizens who falls under such criteria will obtained IDR300,000 each months from the Government.
Through the enactment of MoM Reg 5/2025, the Government demonstrates its effort to enhance the accuracy, fairness and efficiency of the BSU programme by recalibrating eligibility requirements, refining priority criteria and clarifying the disbursement mechanism. These adjustments are intended to ensure that wage subsidies are more effectively targeted at vulnerable workers who are most in need of support, thereby reinforcing the BSU's role as a social safety net in times of economic pressure.
Re-Establishment of the Manpower Information System
On 30 December 2024, the MoM issued MoM Regulation No 17 of 2024 on the Manpower Information System ("MoM Reg 17/2024") replacing and annulling its previous regulation, namely MoM Reg No PER.19/MEN/IX/2009 on the same. This new regulation stipulates the establishment as well as expansions of the SIAPkerja platform, a web-based system/application that would assist the Indonesian public in finding employment, obtaining upskilling courses and learning about Manpower regulations.
The SIAPkerja is not only a service platform but also part of the Government's broader initiative under One Data Indonesia (Satu Data Indonesia), ensuring uniformity, accessibility and integration of manpower data nationwide (Articles 2-3 of MoM Reg 17/2025).
Since 22 May 2025, the platform has become a requirement to be used by job seekers to register an account in order to participate in and attend job fairs and programmes, such as the Independent Workers programme which aims to teach and educate young entrepreneurs on how to develop their own independent businesses. The revitalisation of the Manpower Information System signifies the Indonesian Government's attempt to address rampant joblessness amongst the Indonesian youth. In this regard, the platform has included a wide range of various employment related services, structured into five main categories.
- Vocational training and productivity – covering competency standardisation, training institutions, apprenticeship programmes, productivity improvement, trainers and professional certification (Article 4 (2) of MoM Reg 17/2025).
- Job placement and job opportunity expansion – including foreign manpower utilisation, domestic placement and labour intermediation services (Article 4 (3) of MoM Reg 17/2025).
- Industrial relations and social security – covering employment relations, wages, social security, dispute prevention and settlement, and industrial mediators (Article 4 (4) of MoM Reg 17/2025).
- Labour inspection and occupational safety and health (OSH) – including inspection systems, occupational safety and health institutions and testing, compliance inspections and certified inspectors (Article 4(5) of MoM Reg 17/2025).
- General employment services – covering One Employment Data, legal documentation and information networks, complaints handling, news and assistance services (Article 4(6) of MoM Reg 17/2025).
New Measures for the Implementation of a Work-Related Accident Security Programme
Work-related accident security programmes were previously governed by MoM Regulation No 5 of 2021 on the Implementation of Work Accident Insurance, Death Insurance, and Old Age Insurance ("MoM Reg 5 2021"). This regulation stipulates the procedures for registration, reporting and membership under the programmes. The Government further refined the implementing regulation through the issuance of MoM Regulation No 1 of 2025 on the amendment of the MoM Reg 5/2021 ("MoM Reg 1/2025"). One of the most significant updates under this new regulation is the expansion of the definition of "work accidents" that are covered by the Work Accident Insurance.
A notable addition under MoM Reg 1/2025 is the inclusion of incidents of physical violence and sexual assault (Article 7 (2) paragraph g of MoM Reg 1/2025) within the definition of work accidents. Such cases must be substantiated by a police report and supported with a medical forensic examination (visum et repertum). By expressly recognising sexual assault and workplace violence as work accidents, the Government reinforces its commitment to strengthening worker protection against harassment and ensuring that victims are entitled to compensation and safeguards under the Work Accident Insurance framework.
Implementation of the Job Loss Security Programme
The Government has revised provisions under the Government Regulation No 37 of 2021 on the Implementation of Job Loss Security Programme ("GR 37/2021") by issuing new Government Regulation No 6 of 2025 on the amendment of GR 37/2021 ("GR 37/2021"). These amendments not only refine the framework of the Job Loss Security Programme but also reaffirm the role of other key social security schemes administered under the national system, namely; National Health Insurance (Jaminan Kesehatan Nasional or JKN); Work Accident Security (Jaminan Kecelakaan Kerja or JKK); Old Age Security (Jaminan Hari Tua or JHT); Pension Security (Jaminan Pensiun or JP); Death Security (Jaminan Kematian or JKM); and Job Loss Security (Jaminan Kehilangan Pekerjaan or JKP).
This regulation has introduced several key changes to the JKP framework, harmonising obligations and strengthening worker protection. Under previous regulation, only large and medium enterprises were required to enrol workers in JKN, JKK, JHT, JP and JKM, while micro and small enterprises had a slightly lighter obligation covering only JKN, JKK, JHT and JKM. The issuance of this amendment modifies this framework by clarifying that enrolment in JKN is mandatory for all enterprises regardless of size. In practice, this harmonises obligations and strengthens compliance, ensuring universal coverage under the national health insurance scheme.
Additionally, the JKP premium rate has been reduced from 0.46% to 0.36% of an employee's monthly salary, easing the financial burden on employers while maintaining employee protection.
The regulations also stipulate the implementation of cash benefits to be received by employees who were laid off for a period of six months following their termination of employment (the "Benefit Period"), where the employee will receive 60% of their wage each month for that Benefit Period. However, if the employee earns above IDR5 million per month, they will instead only receive up to 60% of such threshold. Additionally, aside from the above cash benefits, employees may receive Job Training through the Manpower Information System.
To further protect the employees in special circumstances of termination, if a company goes bankrupt or ceases operations with contribution arrears of up to six months, workers' JKP benefits will still be paid by BPJS, while the arrears and penalties remain the employer's responsibility. In addition, the timeframe for filing claims has been extended from three to six months, giving employees greater flexibility in accessing their entitlements. Collectively, these reforms reflect the Government's effort to balance employer obligations with stronger worker protections and broader access to social security benefits.
The regulation also tightens requirements regarding the proof of termination by mandating formal documentation, including acknowledgment of termination, industrial relations court stipulation, termination reports or binding court decisions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
