Indonesia (ID)
Bali and beyond — Indonesia is a vast tropical archipelago of 17,000+ islands offering affordable living, extraordinary cultural diversity, world-class nature, and a rapidly growing digital economy that attracts digital nomads, retirees, and professionals from around the globe.
Employment Rights
Sick leave, dismissal protection and red flags in Indonesia.
Indonesian employment law is governed primarily by UU No. 13/2003 (Manpower Law) as significantly amended by UU No. 11/2020 (Cipta Kerja — Omnibus Law) and its implementing regulations (PP 35/2021). The Omnibus Law was controversial — challenged by trade unions (KSPI, KSPSI) and partially revised by the Constitutional Court in 2023 — but remains largely in force for 2026. Key reforms include: fixed-term contract extension, simplified severance calculation, and outsourcing deregulation. Foreign workers (TKA) are governed by additional requirements: RPTKA, IMTA, minimum salary, and prohibition on certain positions reserved for Indonesians. Indonesian courts (PHI — Pengadilan Hubungan Industrial) handle labour disputes.
Sick leave
Rules: Paid sick leave is mandatory under Article 93 UU No. 13/2003. Employer must pay for entire period of genuine illness certified by a doctor. Cannot be terminated solely for illness unless extended beyond 12 months threshold (see below).
Doctor note: Doctor's certificate (surat keterangan dokter) required from day 1 of sick leave at most Indonesian companies. Company policy may require notification by a specific time (usually before start of work shift).
Employer pay: Month 1–4: 100% salary. Month 5–8: 75% salary. Month 9–12: 50% salary. After 12 months of continuous illness: employer may initiate termination with compassionate severance (uang pesangon, uang penghargaan masa kerja, uang penggantian hak). Illness from workplace accident: full pay continues under BPJS Ketenagakerjaan JKK coverage.
Long-term: BPJS Ketenagakerjaan JKK (Work Accident Insurance): covers work-related illness and injury — full replacement of salary during treatment period, plus rehabilitation costs. Non-work illness after 12 months: termination with full severance entitlements. No separate long-term disability social insurance beyond JKK for work accidents.
Dismissal protection
Law: UU No. 13/2003 amended by UU No. 11/2020 (Cipta Kerja) — Omnibus Law. Termination requires bipartite negotiation, then mediation (disnaker), then PHI court filing. Wrongful dismissal: employer must pay UPMK (Uang Pesangon dan Penghargaan Masa Kerja) — severance and long-service pay — up to 2× scale. Valid grounds for termination: repeated misconduct, gross misconduct, prolonged illness (12+ months), company closure, efficiency.
Deadline to sue: 30 working days from receipt of termination notice to file bipartite negotiation request with employer. If unresolved: 30 days for Disnaker mediation. If still unresolved: PHI court (Pengadilan Hubungan Industrial). Prescriptions period for PHI claims: typically 1 year from the incident/termination.
Probation
Maximum 3 months for permanent (PKWTT) contracts — cannot be extended or repeated. During probation: full minimum wage and BPJS rights apply; employer can terminate without severance. Fixed-term (PKWT) contracts: no probation period allowed — PKWT is already inherently fixed-duration. Ensure probation terms are written in employment contract.
Notice periods
No statutory minimum notice period specified in UU 13/2003 for all cases — governed by employment contract. Standard practice: 30 days for employees with under 1 year service; 30–60 days for senior employees. For mass layoffs (PHK Massal): prior notification to Disnaker and bipartite committee required. Notice can be payment-in-lieu.
Working time
Max hours: 40 hours/week — either 5 days × 8 hours or 6 days × 7 hours. Maximum working hours including overtime: 12 hours/day (4 hours overtime), 60 hours/week (20 hours overtime in a week). Friday prayers: Muslim employees entitled to 1.5 hours for Jumatan (12:00–13:30).
Min rest: 30 minutes rest per 4 hours work. Minimum 1 full rest day per week (5-day work week: 2 rest days; 6-day work week: 1 rest day). Daily rest between shifts: minimum 11 hours.
Overtime: First 1 hour overtime: 1.5× hourly rate. Hours 2–4 overtime: 2× hourly rate. Weekend/holiday work: 2× for first 8 hours, 3× for hours 9+. Overtime pay mandatory for eligible employees — cannot be waived by contract. Maximum overtime: 4 hours/day, 18 hours/week (per PP 35/2021 amendment).
Vacation
12 working days annual leave after completing 12 months continuous service (PKWTT only). Annual leave cannot be cancelled without employee consent. Carry-forward: employer policy governs — no national statutory carry-forward. Long-service leave (istirahat panjang): employees with 6+ years entitled to 2 months paid leave every 6 years (some companies implement this). Religious holiday bonus (THR — Tunjangan Hari Raya): 1× monthly salary paid before Eid al-Fitr (mandatory by law, payable 7 days before Lebaran). Some multinationals also pay year-end bonus.
Anti-discrimination
UU No. 13/2003 Article 6: prohibits workplace discrimination based on ethnicity, religion, race, gender, political affiliation, and disability. UU No. 8/2016 on Persons with Disability: requires 1% of government employees and 2% of private company employees to be persons with disability. Sexual harassment: addressed via PP 78/2015 and increasingly in company regulations. LGBTQ+ protections: not legally recognised — Indonesia has no anti-discrimination protections based on sexual orientation. In practice: discrimination based on religion is widespread and legally complex given the Pancasila framework.
Contract red flags
- !Contract in Indonesian only for foreign worker — insist on bilingual (Bahasa Indonesia + English) version; both equally binding
- !Salary below USD 1,500/month for foreign workers (IMTA/KITAS requirement minimum)
- !No BPJS Kesehatan or BPJS Ketenagakerjaan enrollment — mandatory for all formal employment
- !No THR (holiday bonus) clause — legally mandatory 1× monthly salary before Eid al-Fitr
- !Overtime waiver — cannot contractually waive statutory overtime entitlement
- !Probation period exceeding 3 months — illegal for PKWTT contracts
- !Contract tied to company visa processing without specifying visa cost responsibility
- !PKWT (fixed-term) contract used for core, permanent business activities — illegal; must be PKWTT
- !IP/confidentiality clause overly broad — requires legal review
- !Unclear termination provisions — ensure UPMK (severance) calculation is per statutory formula
- !Contract lacks specific position description required for RPTKA/IMTA — causes work permit problems
- !Salary below provincial minimum wage — Jakarta UMP: IDR 5,729,876/month (Jan 2026, +6.17% from IDR 5,396,761 in 2025; other provinces have lower rates); foreign workers also face the IMTA minimum of approx USD 1,500/month
Employment Rights
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