The Indonesian government has introduced key changes to its Job Loss Guarantee (Jaminan Kehilangan Pekerjaan, or JKP) Program under Government Regulation (PP) No. 6 of 2025. Effective February 7, 2025, the revised program provides laid-off employees with 60 percent of their salary for up to six months —streamlining the previous tiered system and easing compliance for employers.
Administered by BPJS Ketenagakerjaan, the reform aims to support unemployed workers while balancing business sustainability during periods of economic stress. The policy also comes with new responsibilities and cost adjustments for companies operating in Indonesia.
From tiered payments to a flat 60% benefit
The original JKP scheme, launched in 2021 under PP No. 37, offered a declining payout: 45 percent of wages for three months, followed by 25 percent for another three. The updated policy replaces this with a single-tier structure—60 percent of salary for six months. However, benefits are capped based on a maximum salary of 5 million rupiah (US$ 302), with a maximum payout of 3 million rupiah (US$ 181) per month.
This change allows quicker disbursement of support and simplifies benefit calculations, though the income cap may limit support for higher-wage earners.
Lower employer contributions
To ease the burden on businesses, the contribution rate to the JKP fund has been reduced from 0.46 percent to 0.36 percent of an employee’s monthly wage. This move is expected to provide cost relief, especially in labor-intensive sectors.
Protections amid bankruptcy
PP 6/2025 introduces Article 39A, ensuring that laid-off workers remain eligible for JKP even if their employer becomes insolvent. In such cases, BPJS Ketenagakerjaan will continue disbursing benefits directly. Nonetheless, employers remain legally liable for any unpaid contributions or penalties.
Claim process and disqualification criteria
To receive benefits, workers must file a claim within six months of termination. Those who find new employment or pass away before claiming are disqualified. The program uses a two-stage payment process: an initial disbursement in the first month, followed by monthly payments for the remaining period, contingent on continued unemployment.
What this means for employers
The revised JKP program introduces both relief and accountability. Employers benefit from reduced payroll obligations but must ensure timely compliance with contributions and documentation to protect employee entitlements.
Implications for foreign investors
For foreign businesses in Indonesia, the updated JKP framework highlights the importance of aligning with evolving labor policies. Beyond compliance, proactive adjustment of HR procedures—including redundancy planning, severance modeling, and social security contributions—can help mitigate legal and reputational risks.
While the updated scheme simplifies administration and offers a more predictable payout model, it also signals increased scrutiny of employer responsibilities in the event of layoffs or insolvency.
Conclusion: Aligning with labor policy trends
Indonesia’s revision of the JKP program reflects broader government efforts to stabilize its workforce amid economic headwinds. For companies and investors, adapting to these changes is essential — not only to meet compliance obligations but also to build credibility as a responsible employer.
Source – https://www.aseanbriefing.com/news/indonesia-updates-job-loss-program-what-employers-need-to-know/