Government Issues New Outsourcing Regulations, Limiting Contract Worker Recruitment

The Minister of Manpower, Yassierli, has issued Ministerial Regulation on Employment (Permenaker) No. 7 of 2026 on Outsourcing Work, as part of the government’s efforts to strengthen protection and legal certainty for outsourcing workers. The new regulation, issued ahead of Labour Day on 1 May 2026, is described by Yassierli as a concrete step by the government to ensure that outsourcing practices operate more fairly and provide clear protection for workers. “This Permenaker is a follow-up to the Constitutional Court Decision No. 168/PUU-XXI/2023, which mandates restrictions on outsourcing work,” said Yassierli. “The policy aims to provide legal certainty, strengthen worker/labour rights protection, and maintain business continuity.” Under this regulation, the government strictly limits outsourcing work to certain fields, namely cleaning services, food and beverage provision, security, provision of drivers and worker transport, operational support services, and support work in the mining, oil and gas, and electricity sectors. In addition, user companies that outsource part of their work to outsourcing companies must have a written agreement. The agreement must at least include the type of work outsourced, duration, work location, number of workers, work protection, as well as the rights and obligations of the parties. On the other hand, outsourcing companies are also required to fulfil all worker rights in accordance with applicable laws and regulations, including wages, overtime pay, working hours and rest, annual leave, occupational safety and health (K3), health and employment social security, religious holiday allowances, and rights regarding termination of employment (PHK). Yassierli stated that this Permenaker also regulates sanctions for user companies and outsourcing companies that do not comply with the established provisions. “Through this Permenaker, the government reaffirms its commitment to continue promoting the implementation of harmonious, transformative, and just industrial relations with the spirit of advancing industry and prosperous workers,” he said. He also called on all stakeholders to consistently and responsibly comply with this regulation, so that all workers/labourers can be protected and obtain legal certainty.