Politics · Indonesia · 1 day ago
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.
Indonesia’s Law No. 27 of 2026 on Employment Protection sets severance pay for workers who are dismissed according to their length of service.
President Prabowo Subianto signed the law on 28 October 2026, and it was promulgated and took effect on the same date.
Severance pay ranges from one month of wages for less than one year of service to nine months for eight years or more.
Eligible workers may also receive a service award and compensation for certain entitlements.
The law says implementing regulations must be issued within one year of its promulgation.
- Who
- Workers dismissed from their jobs in Indonesia.
- What
- A new law sets severance pay by length of service and provides for service awards and compensation for certain entitlements.
- When
- It was signed, promulgated and took effect on 28 October 2026.
- Where
- Indonesia.
- Why
- Not stated.
This story does not have two clearly opposing sides.
President Prabowo Subianto signed Law No. 27 of 2026.
The law was promulgated and took effect.
- Law
- No. 27 of 2026 on Employment Protection
- Signed
- 28 October 2026
- Severance for under one year of service
- One month of wages
- Severance for eight years or more of service
- Nine months of wages
- Implementing regulations deadline
- Within one year of promulgation
What people are saying
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.
Implementing regulations for this Law must be established no later than 1 (one) year from the date this Law is promulgated.