Apindo Proposes Revisions to PKWT, Wages, Emphasising Business Flexibility and Worker Protection

JAKARTA, KOMPAS.com - The Indonesian Employers Association has proposed several changes in the discussion of the Manpower Bill (RUU Ketenagakerjaan), ranging from regulations on fixed-term work agreements (PKWT), wage systems, to outsourcing.

Chair of Apindo’s Regulation and Institutional Relations Committee, Myra M Hanartani, stated that the business world views the revision of labour regulations as necessary to address challenges not fully covered by the Constitutional Court’s ruling.

“The business world sees this as something that needs to be done. So we have nine main issues that we hope can be considered,” Myra said during the Manpower Bill Working Committee Meeting with Commission IX of the House of Representatives (DPR RI) on Tuesday (14/4/2026).

One of the main focuses is the regulation of PKWT, which is deemed necessary to maintain a balance between business flexibility and worker protection.

She also highlighted the rigid scheme for PKWT compensation payments currently in place.

With the business structure dominated by SMEs, Apindo believes the amount of compensation needs to be more flexible and consider the capabilities of business actors. “The provisions need to be reconsidered so that we consider the compensation money to be affordable,” she said.

On the other hand, Apindo also criticised the wage system, which is seen as not yet optimal in achieving worker welfare goals.

Myra emphasised that the minimum wage essentially functions only as a safety net, not the primary instrument for improving welfare. “The minimum wage is indeed only as a safety net or safety net, not as a welfare instrument,” she said.

She added that the determination of the minimum wage should consider the capabilities of the majority of business actors in a region to remain inclusive and not create excessive burdens.

In addition, Apindo proposed that the determination of sectoral minimum wages be based on agreements between employer associations and worker unions in the relevant sector, before being established by the governor.

According to Myra, this approach is important so that the policies taken are more data-based and reflect the real conditions of each business sector.

In the outsourcing issue, Apindo emphasised the need for regulations that not only maintain business sustainability but also prevent labour exploitation practices.

One of the proposals presented is the implementation of certification for outsourcing companies and strengthening supervision. “What we hope is how the outsourcing industry continues to operate but the workers are not exploited,” said Myra.

Apindo also highlighted the aspect of labour productivity, which is deemed not yet optimal.