Politics · Indonesia · 1 day ago

Indonesia’s new law sets severance pay by length of service

Indonesia’s new law sets severance pay by length of service

Indonesia’s new employment law sets payments for workers who are laid off.

President Prabowo Subianto signed Law No.

27 of 2026 on October 28, and it took effect when it was published that day.

Severance ranges from one to nine months of wages, depending on how long the worker was employed.

Workers with at least three years of service may also receive a separate service award, which rises with length of service.

The law also covers unused annual leave and certain return travel costs, along with other rights set out in employment agreements or workplace rules.

The new rules define what employers must pay when ending a worker’s employment.

The law says implementing regulations must be issued within one year.

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Article 232 of Law No. 27 of 2026Provision on dismissal payments
In the event of termination of employment, the Employer is required to pay severance pay and/or a service award and compensation for entitlements that should have been received, with a multiplier according to the reason for the termination of employment.
via CNBC Indonesia
Article 312 of Law No. 27 of 2026Provision on implementing regulations
Implementing regulations for this Law must be established no later than 1 (one) year from the date this Law is promulgated.
via CNBC Indonesia