New Outsourcing Rules Tightened, Companies Required to Sign Written Contracts

The government is tightening the governance of outsourced work or outsourcing through new regulations that require employing companies to enter into written agreements with labour supply companies. These provisions are outlined in Ministerial Regulation on Manpower (Permenaker) No. 7 of 2026 on Outsourced Work, which was enacted on Thursday (30/4/2026). “This regulation is a concrete step by the government to ensure that outsourcing practices operate more fairly and provide clear protection for workers,” stated Yassierli in an official statement received by Kompas.com on Thursday. The provisions also strengthen supervision to prevent outsourcing practices from proceeding without clear contracts and responsibilities among the involved parties. In addition, Permenaker 7/2026 limits the types of outsourced work to only six fields. The following are the six types of work permitted to employ outsourcing. These rights encompass wages, overtime pay, working hours and rest periods, annual leave, occupational safety and health (K3), social security for health and employment, holiday allowances (THR), and rights regarding termination of employment (PHK). This Permenaker also stipulates sanctions for employing companies and outsourcing companies that fail to comply with the established provisions. The new regulation was issued in commemoration of International Labour Day (May Day) on 1 May 2026. The government invites all stakeholders to consistently adhere to this regulation so that worker protection is further strengthened without disrupting business continuity.