New Era of Manpower Law: Key Changes and Considerations

 Authors: Marshall Situmorang (Partner) and Audria Putri (Counsel) 

On 6 October 2026, the House of Representatives (Dewan Perwakilan Rakyat or “DPR”) approved the Draft Law on Manpower Protection to become Law No. 23 of 2026 on Manpower Protection (the “New Manpower Law”). The New Manpower Law introduces a new framework for manpower protection in Indonesia and is expected to affect various aspects of employment relationships. As of the date of this Employment Tracker, we have not yet obtained the officially promulgated text of the New Manpower Law, and the only text currently available to us is the latest draft. Accordingly, the discussion below is based on such draft and remains subject to confirmation against the officially promulgated text once available. 

Social Security Programmes for Severance Pay and Unemployment 

The New Manpower Law stipulates new provisions governing fund allocation for severance pay and unemployment insurance, as follows: 

• Severance Pay: Employers are now obligated to register their employees in a social security programme, one of which is severance pay security. In connection with this obligation, the employer is also required to pay the relevant contribution fees (Articles 129(1), 129(2)(g), and 135 of the New Manpower Law). Under this programme, employees can receive severance pay security benefits in the event of employment termination (Article 136 of the New Manpower Law). Accordingly, the employer is obliged to cover any shortfall if the benefit available from the severance pay security fund is insufficient. However, any excess benefit will be refunded to the employer (Article 137 of the New Manpower Law). 
• Unemployment Social Security: Employers are also obliged to register their employees in the unemployment social security programme (Articles 129(1) and 129(2)(f) of the New Manpower Law). The contribution for this programme is to be sourced from the contribution paid by the Central Government and other funding sources for unemployment social security (Article 133(2) of the New Manpower Law). Funding sources for unemployment social security consist of (i) initial capital from the Government, (ii) the reallocation of social security programme contributions, and/or (iii) the operating funds of the agency responsible for government affairs in the social and labour sectors (Article 133(3) of the New Manpower Law). 

Clarity on Women Employees’ Rights and Protections 

The New Manpower Law sets out more detailed and comprehensive provisions regarding women employees’ rights and protections. 

• Employer Obligations for Women Employees: For instance, Article 94(1) of the New Manpower Law requires equal opportunity, provision of lactation facilities, implementation of a sexual harassment policy, and periodic reproductive health examinations for women employees. 
• Night Work Limitation: Article 94(2)(a) of the New Manpower Law now explicitly prohibits employers from requiring women employees aged 15 (fifteen) to under 18 (eighteen) years to work from 21.00 until 07.00. Similarly, Article 94(2)(d) of the New Manpower Law provides that pregnant women employees are prohibited from working from 23.00 until 07.00. 
• Menstrual Leave: Women employees are now allowed to take menstrual leave for 2 (two) days by giving notice to the employer, and further governance on this right will be stipulated under an employment agreement, collective labour agreement, or company regulation (Article 99 of the New Manpower Law). 

Protection of Disabled Employees 

Employers are required to employ disabled employees in a number equivalent to 1% of their total employees and to provide protection to disabled employees, depending on the type and degree of disability (Articles 84(1) and 85(2) of the New Manpower Law). 

Prohibition on Detaining Employees’ Diploma Certificates 

Article 66 of the New Manpower Law explicitly prohibits employers from detaining an employee’s diploma certificate or other personal documents as collateral in an employment relationship. However, an exception applies where such diploma certificates or personal documents were obtained through education and training funded by the employer under a written employment agreement. 

Exemptions for Foreign Employees with Indonesian Family Ties 

The New Manpower Law now provides comprehensive provisions on foreign employees who are married to an Indonesian citizen, or who are the child of a marriage between an Indonesian citizen and a foreign national. For instance, Article 52(1) of the New Manpower Law requires employers to prepare a foreign worker utilisation plan approved by the Minister of Manpower (“MoM”). However, this requirement does not apply to a foreign employee who is married to an Indonesian citizen or who is the child of a marriage between an Indonesian citizen and a foreign national (Article 52(3)(d) of the New Manpower Law). In addition, employers are not required to pay compensation for this type of foreign employee at the end of their employment relationship (Article 57(2) of the New Manpower Law). 

Optimisation of Manpower Supervision 

Article 216 of the New Manpower Law provides for competent and independent manpower inspectors to conduct manpower supervision to ensure compliance with manpower regulations. Such manpower inspectors shall be appointed by the Minister of Manpower or appointed officials, having regard to the proportional ratio between the number of inspectors and the number of employees and/or companies in each regency or city (Article 217 of the New Manpower Law). 

Concluding Remarks 

The New Manpower Law introduces several notable changes to Indonesia’s manpower framework, including the establishment of social security programmes for severance pay and unemployment, enhanced clarity on the rights and protections of women employees and employees with disabilities, the prohibition on withholding employees’ diploma certificates, and exemptions for foreign employees with Indonesian family ties. The New Manpower Law also seeks to strengthen manpower supervision to improve the enforcement of manpower regulations. As the officially promulgated text has not yet been obtained as of the date of this Employment Tracker, employers should monitor its official publication and any implementing regulations to confirm the final scope of these provisions and assess their implications for existing employment practices and compliance obligations.