New Outsourcing Rules to be Issued in July, Only Four Support Sectors Exempted

The government will soon revise Minister of Manpower Regulation No. 7 of 2024 concerning outsourced workers, with the new rules expected to be issued by the end of July. Presidential Special Adviser on Manpower and Labour Welfare, Said Iqbal, confirmed that under the revision, the use of outsourced or contract workers will be restricted to only four types of support services: catering, security, driving, and cleaning services. Companies will be given a six-month period to adjust to the new regulation.

Said Iqbal stated that the use of outsourced workers in other sectors will be prohibited. He noted that there was some debate during the drafting process, with proposals to allow outsourcing in additional support sectors. However, he confirmed that private mining and oil and gas companies will no longer be permitted to use contract workers, citing their high profitability and the fact that their operations are typically concentrated in a single location. He highlighted that irregularities in the use of outsourced labour are still found in mining industrial areas such as Morowali and Konawe, particularly among nickel mining companies managed by Chinese investors.

For state-owned enterprises, the new regulation will still permit the use of outsourced workers, but exclusively through their own subsidiaries. Said Iqbal cited the example of PLN, which currently uses a subsidiary, PT Haleyora Powerindo, for its technical field workers. He emphasised that this model should be the standard, ensuring that outsourced workers receive equivalent protection to permanent employees, including wages, allowances, social security, and severance pay.