Minister of Manpower Adjusts Job Loss Benefit Regulation: Improves Process and Access, Establishes Limits
On March 25, 2025, the Minister of Manpower (the “MoM”) issued Regulation No. 2 of 2025 which took effect retroactively from February 7, 2025 (the “Amendment”). The Amendment updates MoM Regulation No. 15 of 2021 on Procedures for the Granting of Job Loss Benefits (the “Regulation”). The Amendment was issued in conjunction with Government Regulation No. 6 of 2025 which amends Government Regulation No. 37 of 2021 on Organization of the Job Loss Benefit Program.
The Amendment introduces improvements to the Job Loss Benefits (in Indonesian, Jaminan Kehilangan Pekerjaan or “JKP”) administered by the Social Security Agency for Employment (“BPJS Ketenagakerjaan”), including clearer provisions, adjusted benefits, and more streamlined processes. However, it also introduces certain important limitations.
We set out below the key highlights of the Amendment.
♦ Cash Benefit Adjustments
The Amendment increases the cash benefit amount by setting it at 60% of the wage for a full six months. Previously, the Regulation provided cash benefits at 45% of the wage for the first three months and 25% for the following three months.
Similar with the Regulation, the Amendment stipulates that the maximum wage used as the basis for calculating the JKP cash benefit is capped at Rp5,000,000 (the “Upper Limit”). Accordingly, if a participant’s latest wage exceeds the Upper Limit, the cash benefit will be calculated based on the Upper Limit rather than the participant’s actual wage.
♦ Access to Benefits
The Amendment simplifies the application process and the eligibility for claiming the JKP. Previously, the Regulation required participants to have: (i) contributed to BPJS Ketenagakerjaan for at least 12 months within the preceding 24 months, and (ii) paid contributions for six consecutive months prior to termination of employment. The Amendment removes the requirement of the six consecutive month contributions, making it easier for individuals with non-continuous contribution histories to qualify for the JKP.
♦ Proof for Claiming JKP
The Amendment introduces a new requirement that participants may submit proof of employment termination in the form of: (i) a deed of registration of a mutual termination agreement issued by the Labor Court; or (ii) a copy of the Labor Court’s decision on employment termination. In such cases, the Amendment provides that the JKP application will be considered submitted as of the date of issuance of the deed of registration or the Labor Court’s decision.
♦ Cash Benefit Eligibility
The Amendment eases certain eligibility requirements for receiving cash benefits. Under the Regulation, participants were required to demonstrate that they had submitted job applications to five different companies within one month. The Amendment relaxes this condition by allowing participants to qualify simply by showing that they have submitted five job applications, regardless of whether they are sent to different companies.
However, the Amendment reinforces certain conditions. To receive the cash benefit for the sixth month, participants are now required to both submit proof of active job seeking and complete an employment status form. Previously under the Regulation, participants could fulfill this requirement by choosing either one of these options.
♦ JKP Payment for Employees of a Bankrupt Company
Under the Amendment if a company closure is due to bankruptcy with outstanding contributions of six months, the JKP benefits for the affected participants will be paid by BPJS Ketenagakerjaan. The company’s bankruptcy must be evidenced by (i) a final and binding court decision, and (ii) a statement letter from the Ministry of Law. However, such payment by BPJS Ketenagakerjaan does not eliminate the company’s obligation to settle the outstanding contributions and any applicable fines.
♦ Adjustment to Job Market Information Benefit
In addition to cash benefits, JKP participants are entitled to receive job market information and job training. With respect to the job market information benefit, the Amendment clarifies that JKP beneficiaries shall obtain a recommendation from a job intermediary officer under the Ministry of Manpower or the relevant regional Manpower Offices. This recommendation is a requirement for accessing job training. Previously, the Regulation did not specify which party could issue such a recommendation.
♦ Job Training Benefit Adjustments
JKP beneficiaries are now permitted to participate in more than one job training session, provided that the training aligns with the results of their career counseling and the total cost does not exceed the limit set under the applicable laws and regulations. Previously, the maximum job training benefit was capped at Rp1,000,000 per person. This cap is now increased to Rp2,400,000. Lastly, the Amendment removes several provisions related to the implementation of job training, including the requirement for beneficiaries to submit a completion report and the involvement of the Ministry of Manpower in the process.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Thomas P. Wijaya (twijaya@aksetlaw.com), or Giorgio Alexander William Robot (grobot@aksetlaw.com) for further information.
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