Enactment of the Law No. 27 of 2026 regarding Manpower Protection

On 28 October 2026, the Indonesian Government enacted Law No. 27 of 2026 regarding Manpower Protection (“Law No. 27/2026”) which revokes Law No. 13 of 2003 regarding Manpower (“Law No. 13/2003”) and Law No. 6 of 2023 regarding the Job Creation (“Law No. 6/2023”), based on the consideration of the following things:

1. Improvement of the manpower regulations to achieve the national development goals;
2. Ensuring of the workforce’ statutory rights, equality of the work opportunity without discrimination and improvement of the workforce quality to fill the work market locally and globally; and
3. Rearranging manpower material stipulation in a distinctive law to overcome the potential disharmonious and unsynchronized substance between Law No. 13/2003 and Law No. 6/2023, as also mandated by Constitutional Court Decision No. 168/PUU-XXI/2023.

In addition to the previous manpower stipulations, the Law No. 27/2026 comprise additional and more detailed manpower stipulations key points among others on informal sector workforce, equal opportunity and treatment, workforce planning and information, child and women protection, training and apprenticeships, welfare, workforce placement, bipartite cooperation body, work opportunity expansion, strike, occupational health and safety environment, wage system, wage structure and scale, increase in the severance pay formula, manpower supervision, severance pay reserve fund.

The inclusion of these matters demonstrates the broader scope of Law No. 27/2026 in regulating not only conventional employment relationships but also wider aspects of workforce protection and employment sustainability. In particular, the more detailed provisions concerning informal sector workers, women and child protection, workforce development, and equal employment opportunities indicate an effort to extend legal protection to different categories of workers and address various challenges in the Indonesian labour market.

Furthermore, the provisions concerning wage systems, wage structures and scales, and the enhancement of the severance pay calculation formula are particularly relevant to employers from an employment cost and human resources management perspective. Employers may need to review their existing remuneration policies, employment termination procedures, and internal manpower-related arrangements to ensure consistency with the new regulatory framework. Similarly, the introduction of provisions concerning a severance pay reserve fund may require further attention from employers in assessing their financial and administrative preparedness for employment termination obligations.

The introduction of more detailed provisions on manpower supervision also highlights the importance of employers maintaining proper compliance with applicable manpower requirements. In this respect, employers should pay particular attention to the implementation of employment policies and procedures, including the fulfilment of statutory workers' rights, occupational health and safety requirements, wage administration, and other employment-related obligations.

Considering the broad scope of the changes introduced under Law No. 27/2026, employers and other relevant stakeholders should carefully review the new provisions and assess their potential impact on existing employment arrangements. Particular attention should also be given to any implementing regulations that may be issued to further elaborate on the provisions of Law No. 27/2026, as such regulations may provide additional technical requirements and implementation guidelines.

Accordingly, employers are encouraged to conduct an internal review of their existing manpower policies, employment agreements, company regulations, collective labour agreements (if any), and human resources practices to identify areas that may require adjustment following the enactment of Law No. 27/2026. Such a review would be important to ensure compliance with the new manpower regulatory framework and to minimise potential legal and operational risks arising from any changes to employers' statutory obligations.

Employers requiring assistance with an internal review of their labour policies, employment agreements, company regulations, collective bargaining agreements (if applicable), and current human resources practices—specifically to identify areas that may require adjustment following the enactment of Law Number 27 of 2026, are welcome to contact our office.

Note: The content of this article does not constitute legal advice and should not be relied upon since there will be implemented regulations to be further issued. If you need specific advice related to this topic, please contact us by email at info@yangandco.com.