10.6092/issn.1561-8048/10937
The COVID-19 pandemic is having a devastating impact on employment and livelihoods in Indonesia. Understanding the implications for workers requires mapping the combined interactions of existing labour law protections, new regulations and social security measures. This all also needs to be understood in the context of national and regional government power-sharing, Indonesia’s large informal economy and the likely worsening of compliance with formal labour protections during the pandemic.  
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Petra Mahy
Italian Labour Law e-Journal
Omnibus Bill on Job Creation
COVID-19 and Labour Law: Indonesia
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National Reports
2020-05-11
2020-05-07
2020-04-15
2020-09-15
ILLeJ
Petra Mahy
2020/05/11
10.6092/issn.1561-8048/10937
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Omnibus Bill on Job Creation
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COVID-19 and Labour Law: Indonesia
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COVID-19 and Labour Law: Indonesia                                               Italian Labour Law e-Journal
Petra Mahy                                                                      Special Issue 1, Vol. 13 (2020)
petra.mahy@monash.edu                                             Covid-19 and Labour Law. A Global Review
                                                                                              ISSN 1561-8048
                                                               https://doi.org/10.6092/issn.1561-8048/10937




                COVID-19 and Labour Law: Indonesia
                          Petra Mahy*

                                                Abstract
     The COVID-19 pandemic is having a devastating impact on employment and livelihoods in
     Indonesia. Understanding the implications for workers requires mapping the combined
     interactions of existing labour law protections, new regulations and social security measures.
     This all also needs to be understood in the context of national and regional government
     power-sharing, Indonesia’s large informal economy and the likely worsening of compliance
     with formal labour protections during the pandemic.
     Keywords: Covid-19; Labour Law; Social Security; Pre-Employment Card Scheme; Omnibus
     Bill on Job Creation.




 1. General Framework

     Indonesia initially had a slow response to the COVID-19 pandemic with national
 leaders denying that there were any cases in the country until early March 20201. Since the
 first cases were acknowledged on 2 March 2020, official case numbers have been
 increasing, and there is good reason to suspect that infection and death rates are much
 higher than the official statistics given limited testing capacity2. Indonesia has the second
 highest death toll in Asia after China, including the loss of many medical professionals. The
 capital city Jakarta has been the epicentre of the outbreak, but there have been cases
 recorded in all 34 provinces. President Joko Widodo has resisted a full national lockdown,
 and only on 21 April 2020 imposed restrictions on the looming annual large movement of
 people (mudik) associated with Ramadan and the Idul Fitri (Eid al-Fitr) holidays.
     It is important to note that Indonesia has a decentralised system of government;
 provincial and regional governments have specified powers including over delivery of local

 *
   Senior Lecturer, Department of Business Law and Taxation, Monash University, Australia.
 1 Tim Lindsey and Tim Mann, ‘Indonesia was in Denial Over Coronavirus. Now it May be Facing a Looming
 Disaster’ (The Conversation, 9 April 2020) <https://theconversation.com/indonesia-was-in-denial-over-
 coronavirus-now-it-may-be-facing-a-looming-disaster-135436>; ‘We Don’t Want People to Panic’: Jokowi
 says on Lack of Transparency Around COVID Cases’ (Jakarta Post, 14 March 2020)
 <https://www.thejakartapost.com/news/2020/03/13/we-dont-want-people-to-panic-jokowi-says-on-lack-
 of-transparency-about-covid-cases.html>.
 2 Tom Allard, Kanupriya Kapoor and Stanley Widianto, ‘Jump in Jakarta Funerals raises Fears of Unreported

 Coronavirus Deaths’ (Reuters, 4 April 2020) <https://www.reuters.com/article/us-health-coronavirus-
 indonesia-funerals/exclusive-jump-in-jakarta-funerals-raises-fears-of-unreported-coronavirus-deaths-
 idUSKBN21L2XU>.
    Petra Mahy                                                                    Italian Labour Law e-Journal
                                                                                 Special Issue 1, Vol. 13 (2020)
                                                                    Covid-19 and Labour Law. A Global Review
                                                                                      Section: National Reports




health care programs and enforcement of nationally-determined labour rights. Often in
advance of national government directions, many lower-level governments have been
declaring local COVID-19 emergencies and imposing social distancing measures including
restricting access to villages and neighbourhoods3. The national government has since been
progressively attempting to reclaim its leadership in respect to the pandemic4. These
national and regional government regulatory responses have been achieved through
executive (rather than legislative) decision-making. The influence of civil society on this
decision-making has been difficult to gauge. While activist NGOs have certainly been
providing critical commentary and lobbying5, there has been reduced ability to gather and
protest in public spaces and also government moves to curb online protest6. Communities,
though, have been very active at ground-level in organising social distancing and assistance
for the poor among other activities.
   On 31 March 2020, the national government declared a health emergency7 and passed a
regulation allowing individual regional governments to apply to the Ministry of Health for
permission to implement ‘Large-Scale Social Restrictions’ (Pembatasan Sosial Berskala Besar)8.
The capital city region of Jakarta was the first to gain permission on 7 April 2020, with a
provincial regulation issued on 9 April formalising these restrictions9. In Jakarta, this
requires all workplaces to be temporarily closed but with exemptions for government
bodies and companies in essential services including health, food, energy, finance,
communications, logistics, construction and public utilities. Restaurants are limited to
takeaway only, and app-based motorcycle transport is limited to goods delivery only. This is
in addition to earlier advice to public service and office workers to work from home
wherever possible. The government of Jakarta was also authorised to provide assistance to
vulnerable groups and incentives to businesses affected by the rules. Other regions outside
the capital have since been steadily coming under the ‘Large-Scale Social Restrictions’.

3 Rebecca Meckleburg, ‘From the Field: COVID-19 Responses in Central Java’ (New Mandala, 17 April 2020)
<https://www.newmandala.org/from-the-field-covid-19-responses-in-central-java/>.
4 Jefferson Ng, ‘Can Indonesia’s Fight Against COVID-19 Overcome Troubled Central-Regional

Coordination’ (New Mandala, 28 April 2020) <https://www.newmandala.org/can-indonesias-fight-against-
covid-19-overcome-troubled-central-regional-coordination/>.
5 For example, ‘Desak Pemerintah Lindungi Hak Pekerja Saat Wabah Covid-19!’ [Petition the Government to

Protect Workers’ Rights in the Covid-19 Pandemic!’] (Amnesty International Indonesia,
<http://amnestyindo.nationbuilder.com/petisi_covid_19_lindungi_hak_pekerja?recruiter_id=155879>
(accessed 30 April 2020).
6 Eve Warbuton, ‘Indonesia: Polarization, Democratic Distress, and the Coronavirus’ (Carnegie Endowment, 28

April 2020) <https://carnegieendowment.org/2020/04/28/indonesia-polarization-democratic-distress-and-
coronavirus-pub-81641>; James Gomez and Robin Ramcharan, ‘Pandemic Shrinks Civic Space’ (Jakarta Post,
25 April 2020) <https://www.thejakartapost.com/news/2020/04/25/pandemic-shrinks-civic-space.html>.
7 Keputusan Presiden No.11/2020 tentang Penetapan Kedaruratan Kesehatan Masyarakat Corona Virus Disease 2019

(COVID-19) [Presidential Decision no. 11/2020 on Declaring a Community Health Emergency for Corona
Virus Disease 2019 (COVID-19)].
8 Peraturan Pemerintah no. 21/2020 tentang Pembatasan Sosial Berskala Besar Dalam Rangka Percepatan Penanganan

Corona Virus Disease 2019 (COVID-19) [Government Regulation no. 21/2020 on Large-Scale Social
Restrictions in Relation to Handling the Corona Virus Disease 2019 (COVID-19)].
9 Peraturan Gubernur DKI Jakarta no. 33/2020 tentang Pelaksanaan Pembatasan Sosial Berskala Besar

Dalam Penanganan Corona Virus Disease 2019 (COVID-19) di Provinsi Daerah Khusus Ibukota Jakarta [Governor of
Jakarta Regulation no. 33/2020 on the Implementation of Large-Scale Social Restrictions in Handling the
Corona Virus Disease 2019 (COVID-19) in the Special Capital Region of Jakarta].


https://doi.org/10.6092/issn.1561-8048/10937                                                                   2
     Petra Mahy                                                                    Italian Labour Law e-Journal
                                                                                  Special Issue 1, Vol. 13 (2020)
                                                                     Covid-19 and Labour Law. A Global Review
                                                                                       Section: National Reports




    On 13 April 2020, the President declared an emergency state of national disaster and
required provincial and regional governments to follow national policies in their response
to COVID-1910.
    The social restrictions and associated economic downturn are having massive negative
effects on workers in both the formal and informal sectors, with official estimates
announced on 20 April 2020 showing some four million workers affected through
dismissals, stand-downs, interruptions to informal businesses and as returned overseas
migrant workers11. The government has also predicted that millions more may lose their
livelihoods12.
    Formally, there are various protections that cover almost all workers under Indonesian
labour law including protections that are particularly relevant to the pandemic situation.
However, surveys show that due to weak enforcement only about 30% of Indonesian
workers are fully covered by labour law in practice13. Given the economic downturn, it is
quite likely that the COVID-19 situation is worsening compliance with workers’ rights.


2. Dismissals

    Indonesia’s labour law contains various protections against dismissal. Fixed-term
workers may have their contracts terminated but compensation for lost wages through to
the end of the contract must still be paid14, meaning that there is little advantage to ending
such contracts early. For permanent workers, dismissals for redundancy are possible if the
company is closing having suffered losses for two consecutive years or due to force majeure15.
There is debate occurring as to whether the declarations of national emergency constitute
force majeure for this purpose, with some legal commentators concluding that the law is
unclear on this matter16. However, at least one prior case from the Courts of Industrial



10 Keputusan Presiden no. 12/2020 tentang Penetapan Bencana Nonalam Penyebaran Corona Virus Disease 2019 (Covid-
19) Sebagai Bencana Nasional [Presidential Decision no. 12/2020 on Declaring the Non-Natural Spread of
Corona Virus Disease (COVID-19) as a National Disaster].
11 ‘Dampak Covid-19, Menaker: Lebih dari 2 Juta Pekerja di-PHK dan Dirumahkan’ [The Impact of Covid-

19, Minister for Labour: More than 2 Million Workers have been Dismissed or Stood Down] (Kompas, 23
April 2020) <https://money.kompas.com/read/2020/04/23/174607026/dampak-covid-19-menaker-lebih-
dari-2-juta-pekerja-di-phk-dan-dirumahkan>; ‘Kini, Ada 2,8 Juta Pekerja Terdampak Covid-19’ [Now There
are     2.8     Million     Workers      Impacted      by    Covid-19]     (Beritasatu,  13     April     2020)
<https://www.beritasatu.com/ekonomi/620111-kini-ada-28-juta-pekerja-terdampak-covid19>.
12 Emma Connors and Natalia Santi, ‘Fears of Social Unrest as Indonesia Enters Dangerous Phase’ (Financial

Review, 20 April 2020) <https://www.afr.com/world/asia/fears-of-social-unrest-as-indonesia-enters-
dangerous-phase-20200420-p54ldb>.
13 Asian Development Bank and BPS-Statistics Indonesia, The Informal Sector and Informal Employment in

Indonesia. (2011).
14 Undang-Undang no. 13/2003 tentang Ketenagakerjaan [Law no. 13/2003 on Labour], art. 62.
15 Undang-Undang no. 13/2003 tentang Ketenagakerjaan [Law no. 13/2003 on Labour], art. 164(1).
16 ‘Employers Struggle Pending Relief from the Government’ (Assegaf Hamzah and Partners, 1 April 2020)

<https://www.ahp.id/employers-struggle-pending-relief-from-the-government>; ‘Jokowi Declares Covid-19
as a National Disaster: A Force Majeure Trigger?’ (Assegaf Hamzah and Partners, 14 April 2020)
<https://www.ahp.id/jokowi-declares-covid-19-as-a-national-disaster-a-force-majeure-trigger>.

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     Petra Mahy                                                               Italian Labour Law e-Journal
                                                                             Special Issue 1, Vol. 13 (2020)
                                                                Covid-19 and Labour Law. A Global Review
                                                                                  Section: National Reports




Relations suggests that government policy can constitute force majeure17. Employers are
required to provide normal severance pay for dismissals under these provisions.
    Redundancy is also possible where the business is otherwise closing for reasons of
efficiency18, but the Constitutional Court held in 2011 that the provision on redundancy for
efficiency reasons is constitutional provided that it only occurs in the context of permanent
closure of the business19. Where redundancy is justified by efficiency, severance pay is set at
twice the usual calculation.
    There are also procedural requirements for dismissal; redundancy should be the last
resort after other measures have been attempted such as reducing management pay and
reducing working hours or placing workers on temporary stand down20. Further, employers
must first negotiate with workers and their representatives and if a genuine agreement is
not reached then employers must make an application to the relevant Industrial Relations
Court before a worker can be dismissed21. It appears that courts are still functioning,
although with reduced hours22.


3. Wage Cuts

   In general, normal wages should still be paid to workers. This includes the Annual
Religious Holiday Bonus (equivalent to a thirteenth month wage) which is due to be paid to
Muslim private sector workers in time for the end of Ramadan at around 23 May 202023.
   As one possibility to delay paying normal wages, employers can apply to the relevant
Provincial Governor for a temporary (up to 12 months) exemption from paying the



17
   ‘Penting!! Inilah Putusan-Putusan PHK Akibat Force Majeur’ [Important! These are the Dismissal
Decisions as a Result of Force Majeure] (Hukumonline, 30 April 2020)
<https://www.hukumonline.com/berita/baca/lt5ea98f3e4e02f/penting-inilah-putusan-putusan-phk-akibat-
iforce-majeur>.
18 Undang-Undang no. 13/2003 tentang Ketenagakerjaan [Law no. 13/2003 on Labour], art. 164(3).
19 Constitutional Court Decision No.19/PUU-IX/2011; ‘Dapatkah Perusahaan Melakukan PHK Karena

Kerugian Akibat Covid-19?’ [Can Companies Dismiss Workers Because of Losses Caused by Covid-19?] (BP
Lawyers, 1 April 2020) <https://bplawyers.co.id/2020/04/01/dapatkah-perusahaan-melakukan-phk-karena-
kerugian-akibat-pandemi-covid-19/>.
20 Surat Edaran Menteri Tenaga Kerja dan Transmigrasi no: SE-907/MEN/PHI-PPHI/X/2004 tentang Pencegahan

Pemutusan Hubungan Kerja Massal [Circular Letter of the Minister for Labour and Transmigration No: SE-
907/MEN/PHI-PPHI/X/2004 on Preventing Mass Dismissals].
21 Undang-Undang no. 13/2003 tentang Ketenagakerjaan [Law no. 13/2003 on Labour], arts. 150–151.
22 ‘Penetapan Pandemi Covid-19 Membatasi Pengajuan Upaya Hukum Para Pencari Keadilan?’ [Does the

Declaration of the Covid-19 Pandemic Limit Access to Justice?] (Kliklegal, 21 April 2020)
<https://kliklegal.com/penetapan-pandemi-covid-19-membatasi-pengajuan-upaya-hukum-para-pencari-
keadilan/>.
23 ‘Dampak Covid-19, Hak Buruh Seharusnya Tetap Dipenuhi’ [The Impact of Covid-19, Workers’ Rights

Should Still be Fulfilled] (Hukumonline, 1 April 2020)
<https://www.hukumonline.com/berita/baca/lt5e843d365ce85/dampak-covid-19--hak-buruh-seharusnya-
tetap-dipenuhi/>; ‘Menaker Ida Pastikan THR Kepada Pekerja Tetap Wajib Dibayarkan’ [Minister for
Labour Confirms that Annual Holiday Bonus Should Still be Paid to Workers] (Kementrian Ketenagakerjaan
Republik Indonesia, 2 April 2020) <https://kemnaker.go.id/news/detail/menaker-ida-pastikan-thr-kepada-
pekerja-tetap-wajib-dibayarkan>.

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     Petra Mahy                                                                 Italian Labour Law e-Journal
                                                                               Special Issue 1, Vol. 13 (2020)
                                                                  Covid-19 and Labour Law. A Global Review
                                                                                    Section: National Reports




regional minimum wage24. Applications require union approval and proof of accounts. The
difference in wages, however, still needs to be paid later and becomes a debt owed by the
employer to worker25. There does not yet appear to be any publicly available data on the
extent to which such exemptions are being applied for and granted in relation to COVID-
19.
    In the new ministerial directions released specifically for COVID-19, any decisions
about changes to wages and conditions for some or all workers should occur in dialogue
and agreement with workers26. This would appear to give employers more flexibility than
usual to renegotiate wages for the duration of the pandemic, and arguably may put workers
at a disadvantage given their likely lower bargaining power27.


4. Temporarily Standing Workers Down Without Pay

    The legality of temporarily standing down workers without pay (dirumahkan) is
somewhat contradictory in Indonesia. On the one hand, the main labour law does not
recognise the practice, although normal paid annual leave may be still used during this time.
    The law does provide that workers who are absent when carrying out civic duties should
still be paid28. Jakarta Legal Aid (LBH Jakarta) has argued that the instruction to non-
essential businesses to close under ‘Large Scale Social Restrictions’ means that workers in
these businesses are carrying out civic duties by staying home to prevent the spread of
COVID-19 and hence that they still have the right to be paid29.
    However, a lower-level ministerial direction recognises that employers might stand
down workers temporarily as an attempt to avoid redundancy30. In such situations, workers
should still be fully paid unless an agreement has otherwise been reached (see above).

24 Undang-Undang no. 13/2003 tentang Ketenagakerjaan [Law no.13/2003 on Labour], art. 90; Keputusan Menteri
Tenaga Kerja dan Transmigrasi no. KEP-231/MEN/2003 tentang Tata Cara Penangguhan Pelaksanaan Upah Minimum
[Minister of Labour and Transmigration Decision no. KEP-231/MEN/2003 on Procedures for Suspension
of Minimum Wage Implementation].
25 Constitutional Court decision no. 72/PUU-XIII/2015; Agus Sahbani, ‘Putusan MK ini Kabar Baik Bagi

Pekerja’ [This Constitutional Court Decision is Good News for Workers], (Hukumonline, 3 October 2016)
<https://www.hukumonline.com/berita/baca/lt57f231254dcfc/putusan-mk-ini-kabar-baik-buat-pekerja>.
26 Surat Edaran Menteri Ketenagakerjaan no. M/3/HK.04/III/2020 tentang Perlindungan Pekerja/Buruh dan

Kelangsungan Usaha Dalam Rangka Pencegahan dan Penanggulangan COVID-19 [Circular Letter of the Minister for
Labour no. M/3/HK.04/III/2020 on Worker Protection and Business Continuity for the Prevention and
Management of the Spread of COVID-19], art II(4); Better Work Indonesia, ‘Workers’ Protection and
Business Continuity Amid the Covid-19 Pandemic’ (Better Work, 17 April 2020) <https://betterwork.org/wp-
content/uploads/2020/04/BWI_covid_FAQs_eng_web.pdf>.
27 ‘Bermasalah Terkait Pekerjaan Karena Pandemi COVID-19?’ [Do You Have Employment Problems

Because       of     the      COVID-19        Pandemic?]      (LBH     Bandung,      20       March  2020)
<http://www.lbhbandung.or.id/bermasalah-terkait-pekerjaan-karena-pandemi-covid-19-16-kantor-lbh-ylbhi-
membuka-posko-pengaduan-bantuan-hukum-online/>.
28 Undang-Undang no. 13/2003 tentang Ketenagakerjaan [Law no. 13/2003 on Labour], art. 93(2).
29 Informasi Covid-19 Untuk Warga’ [Covid-19 Information for Citizens] (LBH Jakarta, Jakarta Legal Aid)

<https://www.bantuanhukum.or.id/web/informasi-covid-19-untuk-warga/> accessed 24 April 2020.
30 Surat Edaran Menteri Tenaga Kerja dan Transmigrasi No: SE-907/MEN/PHI-PPHI/X/2004 tentang Pencegahan

Pemutusan Hubungan Kerja Massal [Circular Letter of the Minister for Labour and Transmigration No: SE-
907/MEN/PHI-PPHI/X/2004 on Preventing Mass Dismissals].

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     Petra Mahy                                                                    Italian Labour Law e-Journal
                                                                                  Special Issue 1, Vol. 13 (2020)
                                                                     Covid-19 and Labour Law. A Global Review
                                                                                       Section: National Reports




5. Sick and Quarantine Leave

   New ministerial directions provide that workers who are under observation for
COVID-19 or otherwise required to be in quarantine or isolation should continue to
receive full pay31. Workers who are actually sick with COVID-19 should be paid under
normal sick leave entitlements which in Indonesia are comparatively very generous
providing for full pay for up to 4 months and then reduced pay in subsequent months32.
However, the new directions and normal sick leave only cover the worker themselves and
do not extend to caring for children or other relatives.


6. Health and Safety

   Employers in Indonesia are generally under a duty to maintain a safe workplace, and
under new ministerial directions, workplace leaders are to integrate COVID-19 prevention
into their workplace health and safety programs and to empower their OHS Committees to
increase workplace health33. Among other steps, employers are required to report any
suspected infections, educate workers about COVID-19, provide hand-washing facilities,
require mask-wearing and monitor workers who may have travelled to infected areas34.
Under the ‘Large-Scale Social Distancing’ regulations applicable in Jakarta, those exempted
workplaces remaining open must provide a clean workplace, ensure physical distancing,
carry out temperature checks and close for 14 days if a suspected case of COVID-19 is
found35.
   The various appeals to employers to direct workers to work from home do not appear
to have addressed work safety issues in the home36.



31  Surat Edaran Menteri Ketenagakerjaan no. M/3/HK.04/III/2020 tentang Perlindungan Pekerja/Buruh dan
Kelangsungan Usaha Dalam Rangka Pencegahan dan Penanggulangan COVID-19 [Circular Letter of the Minister for
Labour no. M/3/HK.04/III/2020 on Worker Protection and Business Continuity for the Prevention and
Management of the Spread of COVID-19].
32 Undang-Undang no. 13/2003 tentang Ketenagakerjaan [Law no. 13/2003], art. 93(3).
33 Surat Edaran Menteri Ketenagakerjaan no. M/3/HK.04/III/2020 tentang Perlindungan Pekerja/Buruh dan

Kelangsungan Usaha Dalam Rangka Pencegahan dan Penanggulangan COVID-19 [Circular Letter of the Minister for
Labour no. M/3/HK.04/III/2020 on Worker Protection and Business Continuity for the Prevention and
Management of the Spread of COVID-19].
34 Surat Edaran Menteri Pendayagunaan Aparatur Negara dan Reformasi Birokrasi Nomor 19 Tahun 2020 tentang

Penyesuaian Sistem Kerja Aparatur Sipil Negara Dalam Upaya Pencegahan Penyebaran Covid-19 Di Lingkungan Instansi
Pemerintah [Circular Letter of the Minister for State Apparatus and Bureaucratic Reform no. 19/2020 on
Adjustment of the Work System of the Civil Service for Preventing the Spread of Covid-19 in Government
Institutions]; Surat Edaran Kementrian Ketenagakerjaan nomor 5/193/AS.02.02/III/2020 tentang Kesiapsiagaan
dalam Menghadapi Penyebaran Covid-19 di Tempat Kerja [Circular Letter of the Ministry of Labour no.
5/193/AS.02.02/III/2020 on Preparedness for Dealing with the Spread of Covid-19 in Workplaces].
35 Peraturan Gubernur DKI Jakarta no. 33/2020 tentang Pelaksanaan Pembatasan Sosial Berskala Besar.
36 Surat Edaran Kepala Dinas Tenaga Kerja, Transmigrasi Dan Energi Provinsi DKI Jakarta Nomor 14/SE/2020

Tahun 2020 tentang Himbauan Bekerja di Rumah (Work From Home) [Circular Letter of the Department of
Labour, Transmigration and Energy of the Capital Region of Jakarta no. 14/SE/2020 on Appealing for Work
From Home].

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     Petra Mahy                                                                   Italian Labour Law e-Journal
                                                                                 Special Issue 1, Vol. 13 (2020)
                                                                    Covid-19 and Labour Law. A Global Review
                                                                                      Section: National Reports




7. Social Security

    The social security response to COVID-19 in Indonesia has involved a patchwork of
different initiatives, both new and building on existing programs. The response has been
rather piecemeal with announcements emanating from different sources at different times
and with various government levels and agencies involved in implementation. The
coordination and delivery problems are immense and there seems to be both overlaps and
likely gaps in coverage.
    On 31 March 2020, President Joko Widodo announced an economic stimulus package
worth IDR 405.1 trillion (USD 24.5 billion) that includes recognition of the need to
increase the social safety net37.
    Indonesia has two key social assistance programs for poor households: the food
voucher program (Kartu Sembako) and a conditional cash transfer program (Keluarga
Harapan). Both the Kartu Sembako and the Keluarga Harapan programs have been ramped up
with increased payments38 and provision has also been made for free or subsidised
electricity for three months for about 30 million customers. Village administrators have
also been directed to reprioritise village funds towards Employment Incentive Cash for
Work Schemes39. In addition, lower-level governments and community organisations
around the country have also been organising delivery of food and basic household
products to the poor and to people required to isolate40.
    On 24 March 2020, the Financial Regulator announced a one-year postponement and
interest reductions for bank and non-bank credit payments for loans of up to IDR 10
billion (USD 645) for micro and small enterprises41. Beginning on 1 April 2020, workers in
the manufacturing sector with incomes below IDR 200 million (USD 12,920) per year will
be exempt from paying income tax for six months42.


37  Peraturan Pemerintah Pengganti Undang-Undang nomor 1 tahun 2020 tentang Kebijakan Keuangan Negara dan
Stabilitas Sistem Keuangan untuk Penanganan Pandemi Corona Virus Disease 2019 (Covid-19) [Government
Regulation in Lieu of Law no.1/2020 on State Fiscal Policy and Financial System Stability for Management of
the Corona Virus Disease 2019 (Covid-19).
38 ‘Dampak Pandemi Covid-19, Pemerintah Percepat Penyaluran Bansos Program Keluarga Harapan’ [The

Impact of the Covid-19 Pandemic, the Government Hurries the Delivery of the Keluarga Harapan Program]
(Kompas, 25 March 2020) <https://nasional.kompas.com/read/2020/03/25/09055051/dampak-pandemi-
covid-19-pemerintah-percepat-penyaluran-dana-bansos-program>; Jeffrey Neilson, Without Social Safety
Nets Indonesia Risks Political Instability Over Covid-19’ (New Mandala, 22 April 2020)
<https://www.newmandala.org/indonesia-risks-political-instability-over-covid-19/>.
39 Surat Edaran Menteri Desa, Pembangunan Daerah Tertinggal dan Transmigrasi no. 8/2020 tentang Desa Tanggap

Covid-19 dan Penegasan Padat Karya Tunai Desa [Circular Letter of the Minister for Villages, Development of
Disadvantaged Regions and Transmigration no. 8/2020 on Village Responses to Covid-19 and Village Cash
for Work Schemes].
40 Meckleburg, above n 3.
41 Peraturan Otoritas Jasa Keuangan Nomor 11/POJK.03/2020 tentang Stimulus Perekonomian Nasional Sebagai

Kebijakan Countercyclical Dampak Penyebaran Coronavirus Disease 2019 [Financial Services Authority Regulation
no. 11/POJK.03/2020 on National Economic Stimulus as a Countercyclical Policy in Relation to the Impact
of the Spread of Coronavirus Disease 2019].
42 Peraturan Menteri Keuangan no. 23/2020 tentang Insentif Pajak untuk Wajib Pajak Terdampak Wabah

Virus Corona [Minister for Finance Regulation no. 23/2020 on Tax Incentives for Tax Obligations
Impacted by the Corona Virus Epidemic].

https://doi.org/10.6092/issn.1561-8048/10937                                                                   7
     Petra Mahy                                                                       Italian Labour Law e-Journal
                                                                                     Special Issue 1, Vol. 13 (2020)
                                                                        Covid-19 and Labour Law. A Global Review
                                                                                          Section: National Reports




   The national government has also brought forward and adapted a signature policy of
President Joko Widodo that had been under development – the Pre-Employment Card
program (Kartu Prakerja)43. The program allows adults to apply for the card which will
provide them each with IDR 3,550,000 (USD 228) worth of benefits consisting of access to
an online training program and four months of post training cash incentives. The training
programs are to be run by ‘digital platform partners’ including Ruangguru, Maubelajarapa
and the online shopping companies Tokopedia and Bukalapak. With a budget allocation of
IDR 20 trillion (USD 1.2 billion), the program aims to reach 5.6 million participants
overall, with 165,000 processed per week. It opened for registrations on 11 April 2020. The
program has already garnered some strong criticism for not having clear criteria for
participation, not being able to handle the huge numbers of registrations it has received44,
for providing online training that may not meet the actual market-driven needs of
participants45, that many of the training courses are already available for free on the
internet46, concern that it is really the online training providers that will profit, and
suspicion that a Presidential advisor and CEO of one of the providers was personally
benefitting47.
   In addition, all formally waged workers should be members of the BPJS Ketenagakerjaan
social security scheme. Informal workers can also voluntarily join the scheme, although
their numbers are relatively low. The old age guarantee (Jaminan Hari Tua) component of
this is an accumulation fund which can be accessed early and in full by members who have
been formally dismissed48. So technically this may not be available to those who have ‘only’
been temporarily stood down or ‘dirumahkan’. Since the COVID-19 outbreak, there has



43 Peraturan Presiden no. 36/2020 tentang Pengembangan Kompetensi Kerja Melalui Program Kartu Prakerja [Presidential
Regulation no. 36/2020 on Developing Work Competence via the Pre-Employment Card Program].
44 ‘Ribuan Nasi Kotak Untuk Bantu Pekerja Harian Terdampak Covid-19’ [Thousands of Rice Meals to Help

Daily Workers Affected by Covid-19] (Kompas, 17 April 2020)
<https://megapolitan.kompas.com/read/2020/04/17/14050061/ribuan-nasi-kotak-untuk-bantu-pekerja-
harian-terdampak-covid-19>.
45 ‘Kartu Prakerja, Penyelemat atau Sekedar Pemborosan Anggaran?’ [The Pre-Employment Card, Saviour or

Just a Waste of Money?] (Kompas, 20 April 2020)
<https://money.kompas.com/read/2020/04/20/073400926/kartu-prakerja-penyelamat-atau-sekadar-
pemborosan-anggaran-?page=all>; Nivell Rayda, ‘COVID-19: Jokowi’s Reskilling Initiative for the
Unemployed          Raises      Questions       over     Effectiveness’       (CNA,       24      April       2020)
<https://www.channelnewsasia.com/news/asia/covid-19-jokowi-s-reskilling-initiative-for-the-unemployed-
12669090>.
46 ‘Materi Pelatihan Kartu Prakerja Dinilai Tak Efektif, Ekonom: Lebih Bagus di Youtube’ [Pre-Employment

Card Training Materials Judged Ineffective, Economist: It’s Better on Youtube] (Kompas,17 April 2020)
<https://nasional.kompas.com/read/2020/04/17/16213791/materi-pelatihan-kartu-prakerja-dinilai-tak-
efektif-ekonom-lebih-bagus-di>.
47 ‘Jokowi’s Millennial Staffer, Ruangguru CEO Resigns from State Palace’ (Jakarta Post, 21 April 2020)

<https://www.thejakartapost.com/news/2020/04/21/jokowis-millennial-staffer-ruangguru-ceo-resigns-
from-state-palace.html>.
48 Peraturan Pemerintah no. 46/2015 tentang Penyelenggaraan Program Jaminan Hari Tua [Government Regulation

no. 46/2015 on Implementation of the Old Age Guarantee Program]; Peraturan Pemerintah no. 60/2015 tentang
Perubahan Atas Peraturan Pemerintah no. 46/2015 tentang Penyelenggaraan Program Jaminan Hari Tua [Government
Regulation no. 60/2015 on Amending Government Regulation no. 46/2015 on Implementation of the Old
Age Guarantee Program].

https://doi.org/10.6092/issn.1561-8048/10937                                                                       8
     Petra Mahy                                                                      Italian Labour Law e-Journal
                                                                                    Special Issue 1, Vol. 13 (2020)
                                                                       Covid-19 and Labour Law. A Global Review
                                                                                         Section: National Reports




been an increase in workers taking up this option49. The implementing agency for BPJS
Ketenagakerjaan will also separately provide cash compensation of IDR 1 million (USD 66)
per month for up to three months for workers who have been laid off50. On 30 April 2020,
the government announced a relaxation of the requirement for payment of employer
contributions to the BPJS Ketenagakerjaan scheme for companies that keep their workers
on51.


8. Indonesian Overseas Migrant Workers

    Indonesia is a migrant-sending country, with an estimated 4.5 million people working
overseas at any one time. In response to COVID-19, a temporary halt to government
processing of outbound migrant workers was decided on 17 March 202052. Workers who
already held work visas were still allowed to depart if receiving countries had not blocked
entry. Large numbers of Indonesian migrant workers have had to return home due to the
worldwide economic downturn, and in some cases deportations, associated with COVID-
19. As of 23 April 2020, it was reported that more than 121,000 migrant workers have
returned to Indonesia53, including many cruise ship workers54, though the numbers may
well be higher. It is very likely that returned workers and their families are particularly
vulnerable at this time given losses to incomes and the expenses associated with travel
home55.


49 ‘PHK Nyata Ramai-Ramai Cairkan BPJS Kenagakerjaan!’ [Dismissals Visible in the Rush to Access BPJS
Ketenagakerjaan             Funds]           (CNBC            Indonesia,         20          April           2020)
<https://www.cnbcindonesia.com/news/20200420163748-4-153172/phk-nyata-ramai-ramai-cairkan-bpjs-
ketenagakerjaan>.
50 ‘Korban PHK Dampak Corona Dapat Rp 1 Juta Per Bulan Per Orang untuk 3 Bulan’ [Laid-Off Workers Due to

Corona Will Get 1 Million Rupiah Per Month Per Person for Three Months] (Kompas, 24 March 2020)
<https://money.kompas.com/read/2020/03/24/213019226/korban-phk-dampak-corona-dapat-rp-1-juta-
per-bulan-per-orang-untuk-3-bulan>.
51 Dzulfiqar Fathur Rahman, ‘Only One-Third of Manufacturers Still Operating: Govt’ (Jakarta Post, 30 April

2020) <https://www.thejakartapost.com/news/2020/04/30/only-one-third-of-manufacturers-still-
operating-govt.html>.
52 Keputusan Menteri Ketenagakerjaan no. 151/2020 tentang Penghentian Sementara Penempatan Pekerja Migran Indonesia

[Minister for Labour Decision no. 151/2020 on a Temporary Halt to Placement of Indonesian Migrant
Workers].
53 ‘Selama Pandemi Covid-19, 121.498 Pekerja Migran Pulang ke Indonesia’ [During the Covid-19 Pandemic,

121,498 Migrant Workers have Returned to Indonesia] (Suara.com, 23 April 2020)
https://www.suara.com/news/2020/04/23/175015/selama-pandemi-covid-19-121498-pekerja-migran-
pulang-ke-indonesia> ; ‘Virus Corona: Jutaan WNI akan Kembali ke Tanah Air, Pemerintah Didesak
Karantina Mereka’ [Corona Virus: Millions of Indonesian Migrant Workers Will Return Home, the
Government Pressured to Quarantine Them] (BBC News Indonesia, 2 April 2020) <
https://www.bbc.com/indonesia/indonesia-52123419>.
54 ‘Covid-19: Crew Members Return to Indonesia as Cruise Liners Halt Global Operations’ (Jakarta Post, 2

April 2020) < https://www.thejakartapost.com/news/2020/04/02/covid-19-crew-members-return-to-
indonesia-as-cruise-liners-halt-global-operations.html>.
55 ‘Penanganan Pemulangan Pekerja Migran Indonesia dalam Masa Pandemik COVID-19’ [Handling the

Return of Indonesian Migrant Workers in the COVID-19 Pandemic] (Migrant Care, 31 March 2020] <
http://www.migrantcare.net/2020/03/pemulangan-pekerja-migran-indonesia-dalam-masa-pandemik-covid-
19/>.

https://doi.org/10.6092/issn.1561-8048/10937                                                                      9
     Petra Mahy                                                                 Italian Labour Law e-Journal
                                                                               Special Issue 1, Vol. 13 (2020)
                                                                  Covid-19 and Labour Law. A Global Review
                                                                                    Section: National Reports




9. Omnibus Bill on Job Creation

   Finally, it is worth noting that Indonesia currently has major amendments to its labour
laws proposed within the draft ‘Omnibus Bill on Job Creation’. This set of sweeping
amendments are being driven by the desire to raise Indonesia’s ranking on the World
Bank’s Doing Business Index and to increase foreign investment in the country. Notable
proposed changes in relation to labour include reduction of rights to severance payments
and paid leave, weakening outsourcing protections, and exemption from paying minimum
wages for labour-intensive industries and SMEs56 – all rights that are especially pertinent to
the COVID-19 situation. Unions and workers have been continuing their campaign against
the changes despite the pandemic57. As per an announcement on 24 April 2020, unions
have successfully forced President Joko Widodo to delay the legislative debates on the
labour section of the Omnibus Bill58.




Copyright © 2020 Petra Mahy. This article is released under a Creative Commons
Attribution 4.0 International License




56 Esther Samboh, ‘Key Points of Labor Reform in Omnibus Bill on Job Creation: What we Know so Far’
(Jakarta Post, 13 February 2020) < https://www.thejakartapost.com/news/2020/02/13/key-points-of-labor-
reform-in-omnibus-bill-on-job-creation-what-we-know-so-far.html>.
57 ‘Workers Blast Lawmakers with Messages Opposing Omnibus Bill on Job Creation’ (Jakarta Post, 9 April

2020)
<https://www.thejakartapost.com/news/2020/04/09/workers-blast-lawmakers-with-messages-opposing-
omnibus-bill-on-job-creation.html> ; ‘Desperate Workers to Hold Mass Rallies Against Job Creation Bill
Despite Pandemic’ (Jakarta Post, 17 April 2020)
https://www.thejakartapost.com/news/2020/04/17/desperate-workers-prepare-to-rally-nationwide.html.
58 ‘Indonesia Delays Deliberations Over Labor Issues in Omnibus Bill Amid Backlash’ (Jakarta Post, 25 April

2020)
<https://www.thejakartapost.com/news/2020/04/24/govt-house-delay-deliberations-over-labor-issues-in-
omnibus-bill-amid-backlash.html>.

https://doi.org/10.6092/issn.1561-8048/10937                                                                10
