Probation in Indonesia Caps at 3 Months: Pay Cannot Go Below Minimum Wage, Benefits Still Apply

Indonesia's Law Number 27 of 2026 on Labour Protection, in force since 28 October 2026, caps probation for permanent employees at three months. According to a summary published by Fortune Indonesia on 9 November 2026, pay during those three months may not fall below the minimum wage, and social security must be provided throughout.

For many small businesses this touches two long-standing habits at once: a lower "training salary" for newcomers, and delaying social security enrolment until someone "passes probation". This article sets out what has been reported, then offers practical guidance on reworking the package you give new hires.

What has been reported

Fortune Indonesia's summary lists four points that bear directly on the employee probation period Indonesia now allows:

• Probation for workers on an open-ended employment agreement (PKWTT, the Indonesian term for permanent employment) lasts three months at most.
• During probation, pay may not be below the minimum wage.
• During probation, social security must still be provided.
• A fixed-term employment agreement (PKWT, the Indonesian term for contract employment) may not contain a probation period.

The same source notes that workers with less than one year of service receive the minimum wage. In other words a newcomer, whether still on probation or past it, sits in the same group as far as pay is concerned.

One caveat matters: all of this comes from a media summary, not from the text of the law. Technical details may still be clarified by implementing regulations.

Old habits and where things stand

What about micro and small enterprises

Fortune Indonesia also reports that micro and small enterprises are exempt from the minimum wage provisions, with a floor of at least 50% of the minimum wage. The source does not explain how that exemption interacts with the probation rule, and it does not set out the criteria for a micro or small enterprise under this law.

We therefore draw no conclusion. If your business might fall into that category, do not assume the 50% floor automatically applies to staff on probation. Check the text of the law and wait for the implementing regulations.

What you can tidy up this week

This section is our practical advice, not the content of the law.

1. List everyone currently on probation. A simple sheet will do: name, start date, type of agreement (permanent or fixed-term), current pay and social security status. The list shows at a glance whose probation has already run past three months and whose pay is still below your region's minimum wage.

2. Review your offer letter and contract templates. Look for three things: a probation longer than three months, wording such as "training salary" or "salary during probation" with a figure below the minimum wage, and a probation clause inside a fixed-term contract. Templates are where mistakes get repeated, so fix them first.

3. Recalculate the cost of a new hire. If you have been budgeting the first three months at a lower wage and without social security contributions, your year-end hiring budget needs to be redone at full pay with contributions from day one. Better to find out now than on payday.

4. Enrol social security at the start. Make enrolment part of onboarding, alongside collecting bank details and signing the agreement, rather than a step that waits for an evaluation.

5. Do not use a contract as a substitute for probation. Some businesses use a short contract to "try someone out". Because a fixed-term contract may not contain probation and has its own limits on use, choose the form of agreement that fits the nature of the job, not a workaround.

Using the three months properly

Three months is short when it is not planned. Since the pay is the same as for any other new employee, the only value of probation is the chance to assess clearly. A workable structure:

• Day one: write down three to five things the employee must be able to do by the end of month three. For a shop admin, for example: answer customer questions according to the guide, record orders without errors, and close the daily cash count alone.
• End of month one: a 20-minute conversation. What works, what does not yet, what is in the way. Write it down.
• End of month two: a second conversation with the same questions. If you have doubts, say so plainly now so the employee has time to improve.
• Second week of month three: decide. Do not wait for the last day, because a late decision usually ends in "let's just carry on" with no assessment at all.

Written notes from each conversation help both sides. The employee knows the yardstick, and you have a basis if the final decision is not to continue.

What is still unclear

• Technical details to be set by implementing regulations.
• The treatment of micro and small enterprises during probation.
• What happens to agreements signed before 28 October 2026 that carry a longer probation. The source does not address it.

If attendance, leave and payroll already sit in one place, for example in Polynusa, each new hire's start date and pay are easier to keep an eye on from day one.

Note: this article summarises news reports and is not legal advice. Confirm your own case with an employment consultant or the local manpower office.

Sources

• Fortune Indonesia, 9 November 2026: UU Nomor 27 Tahun 2026 Resmi Berlaku

FAQ

How long can probation last in Indonesia under Law 27/2026?

According to Fortune Indonesia's summary, probation for permanent employees is capped at three months.

Can an employer pay less than the minimum wage during probation?

No. The summary states that pay during probation may not fall below the minimum wage and social security must still be provided.

Can a fixed-term contract include a probation period?

No. A fixed-term contract, known as PKWT, may not contain a probation period.