Indonesia – National Regulations in Employment Law

We, the International Labour and Employment Group of Rödl & Partner, are happy to advise you on labour law issues (individual and collective) as well as social security law issues on a global, regional and local level.

Below you will find basic information on national labour law provisions in Indonesia.

Interview with Vita Surya Nirmala

Are there national and/or local collective agreements in the country that regulate labour relations?

No. Labor collective agreement can only be entered between a company and its workers where union(s) exist.

Are there different legal rules by department/canton?

No.

Is there and what is the staff threshold above which the presence of staff representatives is mandatory?

No. Standard, workers/staff representative is usually determined by the authority depending on the purpose (such as for registration of employee handbook/company regulation).

Are trade unions present in the company?

Not compulsory.

If applicable what is the applicable legal working time?

40 hours a week. Different determination is possible depending on the type of work and/or work sector.

Is there a minimum wage set by law/collective agreements (yes/no)?

Yes. By provincial and/or regency/municipality government.

What is the number of legal annual paid holidays?

12 paid leave days per year after 12 consecutive months of working.

Existence of specific classification of employees according to their functions/responsibilities?

Not compulsory. But can be determined by company.

Obligation to set up complementary social insurance schemes (mutual insurance/provident fund/pension)?

Yes. All workers must be registered to mandatory workers’ social insurance covering health (“BPJS Kesehatan”), work accident, provident fund, pension, death, and unemployment (“BPJS Ketenagakerjaan”).