Employment Law in Indonesia

Expert guidance on Indonesian labor regulations, workforce management, and compliance

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Navigating Indonesia's Labor Laws

Indonesia's employment framework under Law No. 13/2003 (Manpower Law) provides strong worker protections while presenting compliance challenges for employers. Key aspects include:

  • Strict termination procedures requiring government approval
  • Mandatory benefits including BPJS health & employment insurance
  • Severance pay requirements up to 32 months' salary
  • Foreign worker restrictions with complex permit processes
200+ Companies Advised

On Indonesian employment compliance

Key Employment Statistics

Rp4.2M

Jakarta Minimum Wage (2023)

40

Hour Work Week

12+

Mandatory Paid Leave Days

32

Max Severance Months

Source: Ministry of Manpower 2023

Our Employment Law Services

Comprehensive solutions for workforce management in Indonesia

Employment Contracts

Drafting compliant employment agreements tailored to your business needs.

  • Permanent vs. contract workers
  • Probation period terms
  • Confidentiality clauses
  • Non-compete provisions
Compliance Localization

Expatriate Work Permits

Navigating Indonesia's complex foreign worker licensing system.

  • KITAS processing
  • IMTA work authorization
  • Dependent visas
  • Localization requirements
KITAS IMTA

Termination & Severance

Managing workforce reductions in compliance with strict regulations.

  • Severance calculations
  • Mutual termination agreements
  • Industrial relations disputes
  • Mass layoff compliance
Termination Severance

BPJS Compliance

Managing mandatory health and employment insurance programs.

  • BPJS Kesehatan (health)
  • BPJS Ketenagakerjaan (employment)
  • Registration & reporting
  • Audit defense
Health Pension

Labor Disputes

Representation in industrial relations conflicts and litigation.

  • Industrial court proceedings
  • Union negotiations
  • Unfair dismissal claims
  • Mediation services
Litigation Mediation

HR Compliance Audit

Comprehensive review of your employment practices and documentation.

  • Policy gap analysis
  • Remuneration review
  • Leave entitlement check
  • Compliance action plan
Audit Remediation

Key Indonesian Employment Regulations

Regulation Key Provisions Compliance Requirements
Manpower Law (No. 13/2003) Governs all employment relationships, termination rules, benefits Mandatory employment contracts, strict termination procedures
BPJS Health & Employment National social security system for all employees Registration of all employees, monthly contributions
Minimum Wage Regulations Provincial and sectoral minimum wages Annual adjustment, sector-specific calculations
Foreign Worker Rules (PP 34/2021) Restrictions on expatriate employment IMTA work permits, localization plans, position restrictions
Omnibus Law (UU Cipta Kerja) Recent reforms to labor flexibility New types of employment contracts, severance adjustments

Employment Setup Process

Steps to compliantly establish your workforce in Indonesia

1

Workforce Planning

  • Determine local vs. expatriate staffing needs
  • Structure employment contracts (permanent/contract)
  • Plan compensation & benefits packages
2

Documentation

  • Prepare compliant employment contracts
  • Draft company regulations (company rules)
  • Establish HR policies and procedures
3

Registrations

  • Register with BPJS Health & Employment
  • Obtain expatriate work permits (if needed)
  • File mandatory manpower reports
4

Ongoing Compliance

  • Monthly BPJS contributions
  • Annual manpower reports
  • Wage adjustments & policy updates
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