The Indonesian house of representatives (DPR) has approved job production law (RUU Cipta Kerja) - commonly known as the "Omnibus Law". The Omnibus legislation amends a sourse of present laws, consisting of Law No. 13 the 2003 on labor ("Labor Law") and also Law No. 40 that 2004 top top National sosial Security mechanism ("Social defense Law"). This alarm will focus on chapter IV that the Omnibus Law, i beg your pardon covers employed matters.

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Essential Changes

Essential Changes

Changes to the labor Law

Foreign workers

A company employing a international worker is still compelled to achieve a work-related permit (known as a plan to utilize international workers orRencana Penggunaan Tenaga pergerakan Asing(RPTKA)). However, a job-related permit is not required for a international worker who is, amongst other things, involved by a start-up company, ~ above a organization visit or conducting research for a details period.

Definite titik employment

The Omnibus Law clears provisions on the permitted titik of definite ketentuan employment di bawah the job Law. However, the Omnibus regulation states that lebih-lebih lagi requirements on the type and nature of work, and the periode and expansion of a definite titik employment commitment will be regulation in a government regulation.The Omnibus Law meminta employers to pay compensation come a definite periode employee ~ above expiry that a definite periode employment agreement. The compensation will certainly be based upon the employment period of the relevant employee. Lebih-lebih lagi requirements ~ above the compensation pay will be regulated dibawah a federal government regulation.


The Omnibus regulation removes certain provisions on outsourcing dibawah the labor Law. However, the Job creation Law stipulates that protection of workers in one outsourcing arrangement as well as the relevant organization licenses because that an outsourcing plan will be lebih jauh stipulated in a government regulation.


The Omnibus legislation extends the preferably overtime hours to four hours a day and 18 hours a week. The preferably overtime hours, however, room not applicable for certain business sectors or work. As the Omnibus legislation states that overtime hours and overtime pay will certainly be further regulated under a federal government regulation, further clarification on particular business sectors or work-related that room not subject to the maximum overtime hours and also the applicable maximum overtime hours that would use for those sectors or work must be addressed in the federal government regulation.

Minimum wage

The Omnibus Law clears provisions of the Labor regulation on sectoral minimum wage and the opportunity for employers come defer the payment of minim wages. However, it maintains the duty of governors to recognize the provincial minim wage. A governor may juga determine the minimal wage in particular regencies/cities within the district by taking into account the economic growth and inflation rate of the relevant regency/city.Micro and small businesses room exempt indigenous the minimal wage requirement.

Termination of employment

In general, there is no far-ranging change in the procedure for discontinuation of employment. However, dibawah the Omnibus Law, if discontinuation cannot it is in avoided, the employer must educate the employee and/or the union that its intention and also the reason for termination. If the employee/union does not agree v the termination, the matter will it is in processed according to the industrial dispute settlement procedure (governed under Law No. 2 of 2004 on settlement of Industrial hubungan Disputes).Employers room not compelled to provide an alert of termination when the employment is terminated due to the employee's spontaneous resignation, expiry that a definite ketentuan employment agreement, the employee reaching the applicable retirement period or the employee's death.The Labor legislation provisions the prohibited labor from terminating employment for particular reasons continue to apply. However, termination because an employee has actually a blood partnership and/or a marital connection with lainnya employee is no much longer subject to an exemption (under the job Law, an employed agreement, company regulations or cumulative labor agreement could grant one exemption indigenous this prohibition).The Omnibus Law usually recognizes all factors for termination formerly regulated under the labor Law. However:The factors for termination are no longer limited to itu set out di bawah the law due to the fact that the Omnibus law specifically claims that an employed staff agreement, company regulations or collective labor agreement can set out other reasons because that termination.The Omnibus regulation specifically recognizes a company's efficiency measures and a company being dibawah asuspension the payment obligation(penundaan kewajiban pembayaran utangor PKPU) as reasons for termination.The Omnibus Law melakukan not specifically call for the issuance the warning letters for termination because of an employee's violation the the employment agreement, agency regulations or collective labor agreement.Instead of specifying particular conducts of one employer that an employee have the right to use come initiate the discontinuation of employed (e.g., assaulting the employee and also not paying the employee's salary), the Omnibus Law generally provides the the employment deserve to be terminated if the employer's conduct hurts the employee.

Further requirements and also procedures for discontinuation of employment will certainly be regulated under a federal government regulation.

Unlike the labor Law, the Omnibus Law melakukan not include details provisions ~ above the termination payment formula that correspond v the reason for termination. However:The Omnibus law still requires employers to salary employee severance pay, long company pay and also compensation of kebenaran in the event of termination. The formerly regulated minimal calculation that severance pay and also long organization pay under paragraphs (2) and (3) of short article 156 of the Labor law are currently the maximum amount of severance pay and also long service pay dibawah the Omnibus Law. Further, housing and also medical compensation (which was calculated in ~ 15% of the berbisa severance pay and also long service pay) is no much longer an facet of compensation the rights.Further needs on severance pay, long organization pay and also compensation of kebenaran will it is in regulated di bawah a government regulation.

Amendment to the social Security Law

The Omnibus regulation introduces a new social security program, i.e.,jaminan dirugikan pekerjaanor unemployment security. This freshly introduced program will it is in administered through the Manpower social Security Organizing company (Badan Penyelenggara jaminan Sosial (BPJS) Ketenagakerjaan).Terminated employees are entitled to services from the unemployment masyarakat security program in the membentuk of cash, accessibility to details on the job pasar and task training.

The implementation that the unemployment security program will be lagi regulated di bawah a government regulation.

Implementing Regulations

The Omnibus Law provides that the relevant implementing regulations, including government regulations, need to be issued at the latest three months after the enactment of the Omnibus Law.

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The currently implementing regulations of the labor Law and also the social Security regulation remain effective to the tingkat they execute not contradict the provisions under the Omnibus Law. This implementing regulations should be harmonized through the provisions under the Omnibus law at the latest 3 months after ~ the enactment of the Omnibus Law.