Company Regulations in Indonesia: When a Handbook Must Be Filed
Company regulations in Indonesia are required once you employ ten people. What goes in them, who ratifies them, and the two-year renewal date.
- UU No. 13 Tahun 2003 on Manpower — Article 108(1), company regulations at ten employees and effective on ratification; Article 108(2), the exemption where a collective labour agreement exists. Article 109, drawn up by the employer; Article 110, the employees' representatives; Article 111, the contents, the bar on falling below the law and the two-year term. Article 112, ratification within 30 working days, and deemed ratification; Article 113, a change during the term. Article 114, telling staff and giving them the text; Articles 116, 123, 129 and 132, the collective labour agreement
- UU No. 6 Tahun 2023 — Article 81, which amends the Manpower Law in 71 points. Point 69 replaces Article 188, the fine for a minor offence; point 70 replaces Article 190, the administrative sanctions list. Articles 108 to 135 are not among the provisions it amends; Article 77(4) on working hours and Article 154A(1)(k) on warning letters are among those it does
- Permenaker No. 28 Tahun 2014 — Article 2(2), the six contents; Article 2(5), no lower than the law; Article 3, one document per company and one for each company in a group. Article 4, the representatives' views and that they cannot be disputed; Article 6, seven working days; Articles 7 and 8, who ratifies and the two documents filed. Article 8(5) and Article 10(2), the office's own clocks; Article 12, a change during the term; Article 13(1), renewal filed 30 working days before expiry. Articles 30 and 31, registering a collective labour agreement; Article 33, the online service
- Constitutional Court decision No. 168/PUU-XXI/2023, 31 October 2024 — none of its operative points concerns Articles 108 to 135
Indonesian law recognises exactly three places a term of employment may live: the employment contract, the company regulations (peraturan perusahaan), and the collective labour agreement. An employee handbook is not one of them. Company regulations in Indonesia become compulsory once you employ ten people (Manpower Law, UU 13/2003, Article 108(1)). At that point the handbook you have already written stops being a choice about good practice. It becomes a document with a filing and a renewal date on it.
A new manpower law is expected
The Constitutional Court, in decision 168/PUU-XXI/2023 of 31 October 2024, gave the legislature two years to pass a new manpower law. This page states the law in force on 19 September 2026, and we will re-read it the week a new law is promulgated.
Who needs company regulations in Indonesia
You already have a collective agreement
Then this does not reach you at all. The obligation falls away entirely for a company that already has a collective labour agreement, whatever its headcount (Article 108(2)).
Ten or more staff, no collective agreement
The law asks for a written set, and one set covers everybody — fixed-term and permanent people alike, with no distinction drawn between them (Article 108(1); Permenaker 28/2014, Article 3(1)).
Fewer than ten staff
Nothing to file on this subject at all.
What company regulations are
A rulebook a company writes for itself is not, by itself, company regulations. Indonesia requires more. The employer draws the document up and answers for it (Article 109), having regard to the views of the employees’ representatives (Article 110). It takes effect only once the manpower office ratifies it (Article 108(1)).
One company has one set, and it applies across its branches (Permenaker 28/2014, Article 3(1)–(2)). Where a group has more than one Indonesian company, each company makes its own (Article 3(6)). Once the set is ratified, every employee has to be told what is in it, have it explained, and be given the text (Article 114).
Not having it counts as a minor offence, with a fine of between IDR 5,000,000 and IDR 50,000,000 (Article 188, as replaced by UU 6/2023). It does not appear in Article 190, which lists the breaches that draw administrative sanctions, so no licence and no business activity is at stake.
What goes in them
Five items come from the Law and a sixth from the implementing regulation. That is the whole floor:
- the employer’s rights and duties
- the employees’ rights and duties
- the terms of work — the rights and duties legislation has not already settled
- the company’s rules of conduct
- how long the regulations run
- anything that gives further effect to legislation
(Article 111(1); Permenaker 28/2014, Article 2(2).)
Above that floor the contents are the company’s own. This is where working hours are set, and it is one of the three documents the warning-letter procedure rests on (Articles 77(4) and 154A(1)(k), as amended by UU 6/2023).
The document also sits next to rules the employer does not set — who may be hired, and how people are treated at work. Our guide to equal employment opportunity in Indonesia covers those.
The rule the whole document turns on
Company regulations may improve on the law, and may never fall below it. Where a provision is worse than the legislation, the legislation applies (elucidation to Article 111(2); Permenaker 28/2014, Article 2(5)).
Consulted, not negotiated
Where there is a union, its officers are the employees’ representatives; where there is not, the staff elect representatives themselves (Article 110(2)–(3)). If a union exists but does not have most of the workforce in membership, the employer hears from the people outside it as well (Permenaker 28/2014, Article 4(5)).
Those representatives may give their views, and they may decline to give any (Article 4(2)). Either way the views cannot be made the subject of a dispute (Article 4(6)). The employer decides what the document says.
One case needs actual agreement: a change made partway through the term that leaves people worse off than they were before. That takes the representatives’ consent, and the changed text goes back for ratification (Article 113(1); Permenaker 28/2014, Article 12).
From draft to renewal
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The draft is written and signed
The employer draws the document up and signs it. It is the employer’s own instrument rather than an agreement with anybody (Article 109).
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Views are sought
The draft goes to the employees’ representatives. If nothing comes back within seven working days, the filing may go ahead, with proof that they were asked attached to it (Permenaker 28/2014, Article 6).
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Filed with the manpower office
The signed text, and proof that views were sought. That is the whole filing (Article 8(2)). It goes to the office for the area the company operates in, through the Ministry’s online service, brought in office by office (Articles 7(1) and 33(1)–(2)).
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The office reads it
It checks that the filing is complete and that nothing in the document falls below the law. The substance check takes at most six working days (Article 8(3)–(5)).
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Ratified, and only then binding
Ratification has to be given within thirty working days of the text being received (Article 112(1)). If the document meets the requirements and that window passes without a decision, it is deemed ratified (Article 112(2)).
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Renewed, every two years
A set runs for at most two years and is renewed when the term ends (Article 111(3)). The renewal is filed at least thirty working days before the current set expires (Permenaker 28/2014, Article 13(1)).
How a collective agreement differs
The third instrument is the collective labour agreement, or PKB (perjanjian kerja bersama). It can only be made with a registered trade union (Article 116(1)), so where there is no union the question does not arise — but where one exists it takes the rulebook’s place.
| Company regulations | Collective labour agreement | |
|---|---|---|
| Who draws it up | The employer, alone (Article 109) | Negotiated with a registered trade union (Article 116(1)–(2)) |
| The employees’ part | Representatives give views, which cannot be disputed (Permenaker Article 4(6)) | The union is a party and signs it (Article 124(1)(d)) |
| Takes effect | On ratification (Article 108(1)) | On signature, unless it says otherwise (Article 132(1)) |
| The office’s act | Ratifies it — pengesahan (Article 112) | Registers it — pendaftaran — and cannot refuse (Article 132(2); Permenaker Article 31(5)–(7)) |
| Term | Up to two years, then renewed (Article 111(3)) | Up to two years, extendable once by up to a year (Article 123(1)–(2)) |
| Replaces the other? | Not while a union is present (Article 129(1)) | Yes — the duty is disapplied (Article 108(2)) |
If you employ fewer than ten
Below ten employees nothing requires company regulations. Indonesia asks instead for documents that sit with each person, and every business needs them whatever its size:
- a contract for each employee, written or oral, and where it is written it carries nine stated items (Articles 51 and 54(1))
- a letter of appointment, where somebody permanent was taken on orally (Article 63)
- a wage structure and scale, which every employer must have — this one has no headcount threshold at all (Article 92(1), as amended by UU 6/2023)
A handbook on top of that is good practice, and none of it goes to a government office.
What this means for you
Count the people you employ. Below ten, a handbook is a choice and a good one. At ten, the same material becomes a signed document with a ratification behind it and a date on it — and the date worth marking in the calendar falls thirty working days before the two years run out.
If you already have a handbook, it is the starting point rather than wasted work; what it needs is to be put into the form the manpower office ratifies. Our HR consulting team reads what you have first, then drafts the company regulations and files them for approval. Which contract each role sits on is the layer underneath, and our note on employment contracts in Indonesia covers that.