Holding Employees' Diplomas Is Now Banned by Law in Indonesia: Other Ways to Protect Your Shop

Indonesia's Law Number 27 of 2026 on Employment Protection, in force since 28 October 2026, bans employers from requiring or holding workers' diplomas and personal documents as security for employment. Fortune Indonesia and GEBRAK.ID reported this on 9 November 2026, and Katadata did so earlier, on 6 October 2026, when the bill was passed.

For many shop and service business owners, keeping a new hire's original diploma (ijazah) has been the old way to feel safe: so the employee does not vanish with cash, stock or the customer list. On withholding employee documents Indonesia now has a rule at the level of statute, so that habit has to be replaced. The good news is that the replacements protect you better.

What has been reported

• Fortune Indonesia: an employer may not hold a diploma or personal documents as security, except for company-funded training under a written agreement.
• GEBRAK.ID: employers are prohibited from requiring or holding a worker's diploma or personal documents as security for employment.
• Katadata: the law prohibits employers from holding workers' diplomas and personal documents.
• The Mekari Talenta blog (7 October 2026) notes that this ban previously sat in a circular letter (surat edaran). It has now moved up to a statute.

Two notes to avoid misreading:

• The training exception is mentioned only by Fortune Indonesia. Its conditions and limits are not detailed. Do not use it as a loophole without reading the text of the law, available on the State Secretariat's legal documentation site (JDIH).
• A specific penalty for holding diplomas is not recorded in the sources we read. Fortune Indonesia only says in general that violations of this law can attract sanctions up to revocation of a business licence.

Notice the word "requiring" as well. The ban is not only about keeping a diploma already handed over but also about asking for it as a condition of being hired.

Returning documents properly

From here on, this is our advice.

If there are diplomas, certificates or other original documents belonging to employees in your drawer right now, return them. Do it neatly so no new problem arises:

1. Make a list. Whose document, which document, held since when.
2. Check the condition. If anything is damaged or lost, admit it and discuss how to replace it before the handover.
3. Hand it directly to the owner, not through a colleague.
4. Write a receipt naming the document and the date, signed by both sides. Keep a copy.
5. Attach no conditions to the return, such as signing a debt note or a new contract.
6. Change your hiring process. Remove "submit original diploma" from job ads, forms and contracts. To verify authenticity, look at the original and keep a photocopy.

If a former employee has left but their document is still with you, contact them and return it too.

The real risks, and what controls them

Holding a diploma never really prevented a loss. It only gave the feeling of having leverage after the loss had happened. What prevents losses is day-to-day control. Owners usually worry about three risks.

Cash

• Daily cash handover. The cashier counts, the owner or supervisor recounts, both sign. Differences are discussed that day, not at month end.
• Regular deposits. Do not let cash pile up in the drawer for days.
• Separate duties. The person who receives money should not be the one who records receivables or approves returns.
• Every sale has a record. Sequentially numbered receipts make a missing one obvious.
• Encourage non-cash payment into the business account, not an employee's personal account.

Stock

• Count stock regularly, not necessarily everything. Expensive, fast-moving items get counted weekly.
• Record goods going out with the name of whoever took them.
• List equipment held by staff: work phone, keys, laptop, motorbike. A receipt at handover, an inspection at return.

Customer contacts

This is the risk with the highest value and the least control. If an employee serves customers from a personal number, your customer list in effect lives on their phone. A diploma in the drawer does not change that.

• All customer conversations go through a number owned by the business.
• Conversation history and customer notes are kept in a system the business owns, not on an individual's phone.
• Tiered access. Staff see what they need to do the job. The right to export data or delete conversations stays with the owner.
• Remove access on the last working day. Keep a list of access per person so nothing is missed.

For this part, a tool helps a great deal. With a shared WhatsApp inbox on the business number worked by several staff, plus notes and follow-up tasks per customer, the customer relationship stays with the business when a person leaves. Polynusa provides this, along with bookkeeping that records invoices and payments; details are on the pricing page.

Reasonable agreements instead

Some things can be put in writing without holding anyone's documents:

• A statement of responsibility for the cash and goods held, signed at the start of employment.
• A work handover agreed as an obligation on leaving: a list of what must be handed over and to whom.
• Confidentiality of customer data, in plain language the employee understands.

Avoid swapping the diploma for another security of the same kind, such as holding a different personal document. As reported, the ban covers personal documents, not diplomas only. If you want to use any form of security, ask a consultant first.

Checklist for this week

• Return all original employee documents, with receipts.
• Remove the diploma requirement from your hiring process.
• Start daily cash handover with two signatures.
• Move customer communication to the business number.
• Make a list of access and equipment per employee.

Note: this article summarises news reports and is not legal advice. Confirm the provisions and any exception for your business through the text of the law, an employment consultant or your local manpower office.

Sources

• Fortune Indonesia, 9 November 2026
• GEBRAK.ID, 9 November 2026
• Katadata, 6 October 2026
• Mekari Talenta (blog), 7 October 2026

FAQ

Can an employer in Indonesia hold an employee's diploma?

No. According to Fortune Indonesia and GEBRAK.ID, Law 27/2026 bans employers from requiring or holding a worker's diploma or personal documents as security.

Is there any exception to the ban?

Fortune Indonesia mentions one exception, for company-funded training under a written agreement. The other sources we read do not mention it.

What is the penalty for still holding diplomas?

A specific penalty for holding diplomas is not recorded in the sources we read, so it needs checking in the text of the law.