Laid Off but Still Counted as Employed: BPS Explains

Jakarta, CNBC Indonesia — Someone who is laid off by a formal-sector company is not necessarily recorded as unemployed. If, after being laid off, they seek an income through informal work and meet the minimum threshold of working for one hour a week, they are still classified as employed in labour statistics.

Moh Edy Mahmud, Deputy for Statistical Balance and Analysis at Statistics Indonesia (BPS), said a person is categorised as employed even if they undertake work for only one hour a week to earn an income.

“Workers who are laid off by a company and then move into informal work, or work fewer hours, are still recorded as employed as long as they meet the minimum threshold of one hour’s work a week,” Edy said at a BPS press conference on Thursday (5 November 2026).

Edy said the concept of working for at least one hour a week is not new. BPS follows an international standard set by the International Labour Organization (ILO), which remains in use today.

“The concept of the employed population is that someone who carries out work to help earn an income for at least one hour a week is classified as employed. This is an international ILO concept: one hour of work a week puts someone in the employed category,” he said.

Accordingly, a change in employment status from formal to informal work, including a reduction in working hours, does not automatically mean someone is classified as unemployed. As long as they meet BPS’s employment criteria, they remain recorded as part of the employed population.

Indonesia’s labour force conditions in August 2026 showed that the working-age population reached 220.912 million, an increase of 2.74 million from August 2025.

Of that total, the labour force stood at 155.379 million, up 1.366 million from the same period a year earlier. The number of people outside the labour force was 65.542 million.

The number of employed people also rose by 1.44 million compared with August 2025. Full-time workers numbered 99.85 million, an increase of 1.2 million.

Meanwhile, there were 35.29 million part-time workers, down by 1.01 million. The number of underemployed people reached 12.84 million, an increase of 1.24 million.

The number of unemployed people, meanwhile, was 7.38 million, down by about 77,000 compared with August 2025.

BPS also recorded a labour force participation rate of 70.33% in August 2026, lower than the 70.59% recorded in August 2025.

The open unemployment rate in August 2026 was 4.75%. This means that about five out of every 100 people in the labour force were unemployed.

Although the unemployment rate declined, BPS recorded continuing changes in the composition of employment. Formal-sector workers accounted for 42.07% of employed people, while full-time workers made up 67.47%.