Indonesia's Manpower Protection Bill faces deadlock as labor and employers clash over wages and outsourcing

The Indonesian House of Representatives is racing to pass the Manpower Protection Bill before a recess, with a target date of Oct. 8 or earlier. The legislation, which would reshape wage calculations, outsourcing rules and fixed-term employment contracts, remains contested between the Indonesian Employers Association (Apindo) and the Confederation of Indonesian Trade Unions (KSPI). KSPI president Said Iqbal, also a special advisor to President Prabowo Subianto on labor affairs, noted that a House-facilitated mediation has yet to bridge the divide.

Labor groups have submitted a draft highlighting ten contentious issues, notably stricter outsourcing limits and a ban on fixed-term contracts for full-time jobs, while employers stress operational flexibility. On Thursday, the Federation of Indonesian Metal Workers' Union staged nationwide demonstrations, calling for a 7.5-9.5 % increase in both provincial and city minimum wages, tax exemptions for old-age savings, and a revamp of outsourcing regulations.

The union also rejected proposed severance payments at half the previous level. Said explained the wage increase range is meant to reflect regional economic growth and protect workers’ purchasing power.