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View all search resultsUnions, employers divided over key employment bill provisions
Labor groups are gearing up for nationwide protests, demanding stronger worker protections from changes to the minimum wage formula and tighter limits on contract work to a government-funded severance reserve.
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Labor union members hold banners and wave posters on May 1, 2025, during a Labor Day rally in Jakarta. (AFP/Azwar Ipank)
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abor groups are gearing up for nationwide protests, demanding stronger worker protections in the proposed employment bill, from changes to the minimum wage formula and tighter limits on contract work to a government-funded severance reserve. Employers, meanwhile, are pressing for a bill that protects workers without undermining investment appeal, warning that heavier labor costs and restrictions could deter the country's competitiveness.
The deadlock come as the government targets the end of October to finalize the bill, following a Constitutional Court ruling that ordered the government and House of Representatives to establish a new employment law separate from the Job Creation Law. Regional leaders are also expected to set new minimum wages for their respective provinces before Dec. 24.
Head of the Association of Indonesian Workers (Aspirasi) Mirah Sumirat said the coalition had met with lawmakers, political party leaders and the Indonesian Employers Association (Apindo) to identify and synchronize priority provisions for the bill on Tuesday.
“After looking at the House-initiated bill, it is quite bad. Provisions on a decent standard of living and justice are not reflected in it,” Mirah told The Jakarta Post on Wednesday.
The coalition wants to restore the role of wage councils at the national, provincial and city levels, as well as reinstating basic living standards (KHL) surveys. It also wants to remove the existing “certain index” from the wage formula, with minimum wage adjustments instead based on economic growth, inflation and KHL survey results.
The labor group also wants fixed-term employment contracts (PKWT) limited to one year, compared with the longer periods currently permitted.
For severance, the group wants calculations to revert to those under the 2003 Manpower Law while requiring the government to establish a reserve fund financed by the state budget to ensure workers receive severance when companies fail to pay.
