Outsourcing in Indonesia Is Now Limited to Support Services: Review Your Outsourced Staff

Indonesia's Law Number 27 of 2026 on Employment Protection, in force since 28 October 2026, limits outsourcing (alih daya in Indonesian) to support services. According to Fortune Indonesia's summary (9 November 2026), examples are cleaning, catering, security and worker transport, and where outsourced workers are used in core production, the employment relationship transfers to the user company by operation of law.

Many small and mid-sized businesses use vendor-supplied people without ever calling it outsourcing: an admin from a service provider, daily warehouse hands, couriers, cleaners. This article sets out the Indonesia outsourcing rules as reported and gives a way to check where your business stands.

What has been reported

From Fortune Indonesia:

• Outsourcing is limited to support services such as cleaning, catering, security and worker transport.
• Where outsourced workers are used in core production, the employment relationship transfers to the user company by operation of law. In other words, the worker is treated as yours, not the vendor's.
• When the outsourcing provider changes, workers' rights must be carried over and their length of service counted cumulatively.

The list is not necessarily closed

Two sources do not quite match here, and we record both without choosing.

The words "such as" in Fortune Indonesia's report signal examples, not a complete list. The vendor blog names five categories but was written before the final text was promulgated. So we cannot say the list is closed, and we cannot say other kinds of service are definitely allowed either. The answer is in the text of the law, available on the State Secretariat's legal documentation site (JDIH), and in its implementing regulations.

Step one: map who does what

From here on, this is our advice.

Make one list of everyone who works on your premises but is paid by someone else. For each person or group, note:

• The vendor's name and the contract number or date.
• The actual work done day to day. Write what is really done, not the title in the contract.
• Since when that person has been placed with you.
• Who gives daily instructions: your people or the vendor's supervisor.
• Whether your own employees do the same work.

The second item is the one that most often surprises. The "cleaner" who also helps pack orders. The "warehouse hand" who in fact runs a production machine.

Step two: assess core or support

As reported, the law separates core production from support services. The sources give no detailed definition of either, so at this stage you can only make a first assessment. Three questions help:

1. Does this work produce the goods or services you sell? If so, it leans towards core.
2. If this work stopped for a day, would sales stop at once? If so, it leans towards core.
3. Does it resemble the reported examples? Cleaning, catering, security and worker transport are named clearly.

Then sort into three colours:

This assessment is not a legal ruling. Its purpose is to set the order of conversations, not to settle who is right.

Step three: talk to the vendor

Do not end a vendor contract on the strength of news coverage. Technical details still depend on implementing regulations, and a sudden termination can hurt the workers, the vendor and your own operations. What makes sense now is to ask:

• How the vendor reads the new provisions against the type of service they supply to you.
• Whether they have had guidance from an association or the manpower office.
• What the employment contract status is of the workers placed with you.
• What they plan to do if a type of placement turns out not to be allowed any more.
• If you change vendors, how workers' rights are carried over and service counted, since the coverage says length of service is cumulative.

Get the answers in writing. A serious vendor will already have thought about this.

Prepare scenarios for the red and amber groups

For work that most likely counts as core, it is worth starting the arithmetic without acting on it yet:

• What would it cost if those people became direct employees? Count wages, social security, the holiday allowance and leave. Compare with the vendor's current invoice.
• Can your administration absorb it? Direct employees mean contracts, attendance and payroll that you handle yourself.
• Can any work be rearranged? Sometimes a mix of core and support tasks held by one person can be separated, so the core part is done by your own staff.

If the numbers show that hiring directly is the reasonable direction, a tool can lighten the admin. Polynusa keeps attendance, leave and payroll in one place, so adding a few employees does not mean adding another spreadsheet.

In short

• Map first, assess second. Many owners do not know exactly what vendor-supplied staff do.
• Four examples of support services have been reported clearly. Beyond those, wait for the text and the implementing regulations.
• Talk to the vendor now, decide once there is certainty.

Note: this article summarises news reports and is not legal advice. Confirm the core or support assessment for your business with an employment consultant or your local manpower office before changing any contract.

Sources

• Fortune Indonesia, 9 November 2026
• Mekari Talenta (blog), updated 7 October 2026

FAQ

What work can be outsourced under Law 27/2026?

According to Fortune Indonesia, outsourcing is limited to support services such as cleaning, catering, security and worker transport.

What happens if outsourced workers are used in core production?

Fortune Indonesia reports that the employment relationship transfers to the user company by operation of law.

Should I end my vendor contract straight away?

Deciding from news coverage alone is not advisable. Map the work first, talk to the vendor, and confirm with a consultant.