Workers Must Know: Key Changes in the New Labour Law, from Severance Pay to the Ban on Withholding Certificates
The newly passed Labour Protection Law by the House of Representatives (DPR) brings several changes for workers, ranging from regulations on severance pay, termination of employment (PHK), and severance pay reserve funds, to the prohibition of companies withholding educational certificates and workers’ personal documents.
The Minister of Manpower, Yassierli, stated that the new regulations do not only address four points directly related to workers but also contain 13 new provisions. One of the most notable is the prohibition of withholding certificates, which is now explicitly included in the law.
“The Labour Bill regulates (13 provisions) new matters,” said Yassierli during the 9th Plenary Session of the DPR for the 2026–2027 Session at the Parliament Complex, Jakarta, on Tuesday (6/10/2026).
The ban on withholding certificates and other personal documents is one of the new provisions in the recruitment and placement process for labour. Previously, the government had only issued circular letters regarding this prohibition.
Yassier_li noted that including this ban in the law makes the provision an integral part of the new labour regulations. Furthermore, the new rules cover several other aspects, including competency certification, labour inspection, protection for female workers and persons with disabilities, as well as protection for job seekers and apprenticeship participants.
The second provision relates to the strengthening of work competency certification through the National Professional Certification Agency (BNSP). Under the new regulations, the BNSP is also being strengthened as an independent non-structural institution directly responsible to the President.
Next, labour inspection will be strengthened through the enhancement of inspector human resources. The number of inspectors will consider the ratio between the number of inspectors and the number of workers or companies in each regency and city. The Bill also regulates the formation of a labour inspection committee.
“The inspection will also be conducted by the House of Representatives of the Republic of Indonesia,” said the Minister of Manpower.
The new regulations also mandate the integration of labour data and information between the central and regional governments. This integration aims to support policy quality while synchronising labour planning at both central and regional levels.
For workers experiencing redundancy, there are also regulations regarding severance pay reserve funds and the Job Loss Guarantee (JKP). Yassierli explained that the severance pay reserve fund is designed to anticipate situations where a company lacks the necessary funds when it is required to meet its severance pay obligations.