Indonesia's New Labour Law 27/2026 Is in Force: 10 Things a Small Employer Should Check

Indonesia's Law Number 27 of 2026 on Employment Protection (Pelindungan Ketenagakerjaan) was signed by President Prabowo Subianto and promulgated on 28 October 2026, and according to Fortune Indonesia (9 November 2026) it has applied since that date. It runs to 313 articles in 23 chapters, repeals Law 13/2003 on Manpower, and repeals a number of provisions of Law 6/2023 on Job Creation.

This is the Indonesia labour law 2026 change that small employers have been asking about. Below it is arranged as a checklist for a business with 5 to 50 staff. Every detail comes from media summaries rather than a reading of the statute itself, so treat it as a starting point.

Short background

GEBRAK.ID reported on 9 November 2026 that parliament (the DPR) and the government approved the bill in a plenary session on 6 October 2026, and the President signed it on 28 October 2026. The full text is available on the State Secretariat's legal documentation site, known as JDIH (jdih.setneg.go.id).

Two points to hold on to from the start:

• Implementing regulations are not complete. Fortune Indonesia writes that they must be issued within one year of promulgation, so by 28 October 2027 at the latest. Many technical details wait for government and ministerial regulations.
• There is a note about transition. An HR vendor blog written on 7 October 2026, before promulgation, mentioned a one-year transition period. Media published on 9 November 2026 say the law has applied since 28 October 2026. The two accounts differ, and we do not conclude which is right for each provision. Check the text.

Fortune Indonesia also notes that violations can attract sanctions up to revocation of a business licence.

Ten things to check

The points below summarise Fortune Indonesia's reporting. The suggested checks are ours.

1. Fixed-term contracts

A fixed-term contract, known as PKWT (perjanjian kerja waktu tertentu), is reported to run for at most 2 years, with at most two extensions of up to 1 year each. It must be in writing and in Indonesian. Check: does every contract worker have a written contract, and how long has each been on contract in total.

2. Probation

Probation for permanent staff is at most three months, and a PKWT may not contain a probation period. During probation, pay may not fall below the minimum wage and social security still applies. Check: any "training pay" or contracts stating a longer probation.

3. Working hours

Normal working time is 40 hours a week: 7 hours a day over 6 days, or 8 hours a day over 5 days. Check: your shop or warehouse roster, especially if you open seven days.

4. Overtime

Overtime needs the worker's consent and a written or digital order from the employer, with limits of four hours a day and 18 hours a week. Check: whether overtime has only ever been ordered verbally and left unrecorded.

5. Leave

After 12 months of continuous work, a worker gets at least 12 working days of annual leave. Maternity leave is three months and can be extended in special conditions. Check: whether each person's leave balance is written down rather than remembered.

6. Diplomas and personal documents

An employer may not hold a diploma or personal documents as security, except for company-funded training under a written agreement. Check: whether any original employee documents sit in your office drawer.

7. Social security

Employers must enrol workers in health, work accident, death, old age, pension and job loss cover. Check: who is not yet registered, including new hires.

8. Wages

Workers with less than one year of service receive the minimum wage, and those with longer service follow the company's wage structure and scale. Micro and small enterprises are reported to be exempt from the minimum wage provisions but must pay at least 50% of the minimum wage. Check: your pay list against the provincial minimum wage, and whether your business really falls in the micro or small category under the text.

9. Outsourced workers

Outsourcing is limited to support services such as cleaning, catering, security and worker transport. Check: what work is currently done by people supplied by a vendor.

10. Termination procedure

Before a termination, the employer must first try to prevent it, then hold bipartite talks, meaning direct negotiation between employer and worker, for at most 30 working days. Check: whether you have a written sequence of steps for the day you have to reduce headcount.

What you can tidy up this week

Not every point depends on implementing regulations. In our view these five jobs are safe to do now, because they are administrative housekeeping rather than legal interpretation:

1. Collect all employment contracts in one folder, paper or digital, and note start and end dates.
2. Return any diplomas and original documents still held, with a signed receipt.
3. Create a simple overtime order form that the employee signs or approves.
4. Create a leave balance record per person.
5. Match your staff list against your social security participant list.

What is better left to wait

Some decisions should not be made from news coverage alone:

• Changing the wage structure or relying on the micro and small enterprise exemption. The criteria and conditions need to be read from the text and the implementing regulations.
• Ending an outsourcing vendor contract.
• Deciding what happens to contracts signed before 28 October 2026. The sources we read do not explain the transitional provisions.

For those three, gather the data first and then take it to a consultant.

Make record-keeping a habit

Nearly every point above comes down to written evidence: contracts, overtime orders, leave balances, payslips. Small firms that have run on memory and group chats will feel the change most. Start with one tidy record per employee. If you want a tool for it, Polynusa offers attendance, leave and payroll recorded per person; see the pricing page.

Note: this article summarises news reports and is not legal advice. Read the law on the JDIH site and confirm how it applies to your business with an employment consultant or your local manpower office.

Sources

• Fortune Indonesia, 9 November 2026
• GEBRAK.ID, 9 November 2026

FAQ

When did Law 27/2026 take effect?

According to Fortune Indonesia, it was signed and promulgated on 28 October 2026 and has applied since that date.

Can every detail be applied already?

Not all of it. Implementing regulations must be issued by 28 October 2027 at the latest, so many technical details still depend on government and ministerial regulations.

Where can I read the full text of the law?

The full text is available on the State Secretariat's legal documentation site, jdih.setneg.go.id.