Business groups label Indonesia’s new labor restrictions as ‘counterproductive’

JAKARTA, INDONESIA — Businesses expressed their disagreement with the government’s new regulations on job creation across the country.

During a press briefing, Indonesian Employers Association (Apindo) Chairperson Hariyadi Sukamdani said that the restrictions — especially those in the outsourcing industry — were “counterproductive” to efforts to take advantage of the so-called “demographic bonus”. 

The Government Regulation in Lieu of Law (Perppu) Number 2 of 2022 limits outsourcing to only “parts” of a company’s operational work, with further details to be laid out within government regulation (PP) derivatives. 

However, Manpower Minister Ida Fauziyah countered that the new job creation regulations demonstrated the government’s commitment to providing adaptive protection to workers and ensuring business continuity in response to labor sector dynamics.

Fauziyah explained that some items regarding the employment sector, such as those covering outsourcing, do not lay down restrictions on the types of work that can be outsourced but have been improved to help local workers. 

The regulation also makes improvements and adjustments to the calculation of the minimum wage and how workplaces should cater to people with disabilities.