Indonesia is preparing a major update to its manpower regulations through the Draft Bill on Employment Protection (RUU Pelindungan Ketenagakerjaan). One significant proposed change concerns PKWT (Perjanjian Kerja Waktu Tertentu), or fixed-term employment contracts, particularly regarding the maximum duration.
As of early September 2026, the bill passed the harmonization stage at the DPR’s Legislative Body (Baleg) and is moving to the plenary process. The rules are not final and may change before enactment.
For employers in Indonesia, it is important to understand the proposed changes now. Reviewing current PKWT contracts and planning ahead will help you stay compliant and avoid disruption when the new rules take effect.
What Will Change for PKWT (Fixed-Term Contracts)?
Under the current framework, Law No. 13/2003 on Manpower does not establish an explicit overall maximum duration for a PKWT relationship through extensions. However, Government Regulation No. 35/2021 sets a maximum total period of 5 years for PKWT based on a specified period.
The draft manpower bill proposes a shorter maximum period and tighter extension limits. A PKWT based on a specified period or the estimated completion of particular work would be limited to a maximum of 2 years. It could then be extended twice, up to 1 year each, for a total of 4 years.
Lawmakers have said the change is intended to prevent workers from remaining on fixed-term contracts for long periods and to provide greater career certainty.
| Aspect | Current framework | Proposed RUU |
| Initial PKWT | Depends on agreement/type of work | Maximum 2 years |
| Extension | Permitted within applicable limit | Maximum twice |
| Each proposed extension | — | Maximum 1 year |
| Overall maximum | Generally 5 years | Proposed 4 years |
| Statut | In force | Not yet law |
What Other Workforce Changes Are Proposed?
In addition to PKWT, the draft bill introduces several key changes that will directly impact how you manage your workforce.
- Restrictions on withholding diplomas and personal documents. Employers are generally prohibited from requiring or holding workers’ diplomas or personal documents as security. An exception applies if the employer financed education or training under a written agreement.
- Broader coverage for informal and digital platform workers. The draft bill formally recognizes informal and platform-based workers, extends social security rights, and introduces protections such as algorithm transparency and safeguards against unexplained account deactivation.
- Expanded parental leave and disability quotas. The draft proposes a flexible three-month maternity leave with a possible extension, and minimum hiring quotas for workers with disabilities in both public and private sectors.
These provisions remain under discussion and may change before the law is finalized. Monitor developments closely to stay ahead of compliance.
| Durée | Définition |
|---|---|
| Platform-Based Worker | A worker who performs services or earns income through a digital platform that connects workers with customers or users, including workers whose access to work is managed through the platform. |
| Algorithmic Transparency | The disclosure or explanation of how automated systems or algorithms make or influence decisions affecting workers, such as work allocation, performance evaluation, or access to a digital platform. |
| Account Deactivation | The suspension or termination of a worker’s access to a digital platform, which may prevent the worker from accepting assignments or earning income through that platform. |
What Should Employers Do Now?
The four-year limit is not yet in effect. However, if you employ staff under PKWT, now is the time to review your current employment arrangements.
With the bill still pending, focus on meeting current legal requirements while preparing for the proposed changes.
ILA Global Consulting can help you draft or update compliant employment contracts, manage payroll, and stay ahead of Indonesia’s evolving manpower regulations as the law moves toward passage.
Contact ILA today to review your employment contracts and workforce compliance to ensure you are prepared for upcoming regulations.
Questions fréquemment posées
PKWT (Perjanjian Kerja Waktu Tertentu) is a fixed-term employment agreement used for work with a defined duration or a specific, non-permanent scope, such as seasonal work or a fixed project. It carries a maximum duration under law and cannot include a probation period. PKWTT (Perjanjian Kerja Waktu Tidak Tertentu) is a permanent, indefinite-term employment agreement for ongoing, continuous work; it may include a probation period of up to three months and has no fixed end date. A PKWT that fails to meet the legal requirements for a fixed-term agreement, or that continues past its maximum permitted duration, can be reclassified by law as a PKWTT.
No. As of early September 2026, the draft bill has completed harmonization at the DPR’s Legislative Body and is headed to a plenary session to be proposed as a DPR initiative bill. It has not yet been enacted, and the substance may still change before passage.
Under Government Regulation No. 35/2021, a PKWT based on a specified period can run for a maximum of 5 years in total, including extensions.
The draft bill proposes an initial period of up to 2 years, with up to two 1-year extensions. This would create a proposed maximum duration of 4 years.
Not yet. The current rules under Law 13/2003 and Regulation 35/2021 remain in effect until the new law is passed and its implementing regulations are issued.
