Government Regulation 35/2021 on fixed-term contracts, outsourcing, hours and dismissal

What does PP 35/2021 cover?

Government Regulation 35/2021 on Fixed-Term Employment Contracts, Outsourcing, Working Time and Rest, and Termination of Employment (PP 35/2021) was signed and promulgated on 2 February 2021 (State Gazette 2021 No. 45). It implements the Job Creation (Cipta Kerja) law and covers five areas: fixed-term contracts (PKWT), outsourcing, working time and rest, overtime, and dismissal with severance. As of 7 October 2026, the BPK legal database records it as in force.

Which articles matter for fixed-term contracts (PKWT)?

• A PKWT is based either on a time period or on the completion of a specific job, and may not be used for permanent work (Article 4).
• A time-based PKWT may last at most 5 years including extensions, and service counts from the start of employment (Article 8).
• Daily-paid contracts are only for work of fewer than 21 days a month; at 21 days or more for 3 consecutive months, the job becomes permanent (PKWTT) by law (Article 10).
• A PKWT may not require a probation period (Article 12).
• The employer must register the PKWT online with the Ministry of Manpower (Article 14).
• The employer must pay compensation when a PKWT ends to workers with at least 1 month of service (Articles 15 and 16), including when the contract is ended early (Article 17).

The full worker's guide is at PKWT and PKWTT contracts.

Which articles matter for working hours and overtime?

• Working time is 7 hours a day and 40 hours a week for a 6-day week, or 8 hours a day and 40 hours a week for a 5-day week (Article 21), with 1 or 2 rest days a week (Article 22).
• Overtime is capped at 4 hours a day and 18 hours a week, not counting overtime on rest days or public holidays (Article 26).
• Overtime requires the employer's instruction and the worker's written or digital consent (Article 28).
• Overtime of 4 hours or more requires food and drink of at least 1,400 kilocalories, which cannot be replaced with money (Article 29).
• Overtime pay on a working day is 1.5 times the hourly wage for the first hour and 2 times after that; on rest days and public holidays the multipliers are 2, 3 and 4 times (Article 31). The hourly wage is 1/173 of the monthly wage (Article 32).

How to calculate it: Overtime pay.

Which articles matter for dismissal and severance?

• Article 36 lists the grounds for dismissal, from mergers and efficiency to resignation and retirement.
• The employer must give written notice of the intention and reasons at least 14 working days in advance (Article 37). A worker who disagrees must reply in writing with reasons within 7 working days, and the dispute then goes to bipartite negotiation and the industrial dispute procedure (Article 39).
• Article 40 sets the tables for severance pay (uang pesangon), long-service pay (UPMK) and compensation for rights (uang penggantian hak). Articles 41 to 57 set the multiplier for each dismissal ground.
• A worker who resigns in line with the conditions receives compensation for rights and separation pay (uang pisah) (Article 50).
• For micro and small businesses, the amounts are set by agreement (Article 59).

The tables and explanation are at Severance pay and dismissal.

How does Constitutional Court ruling 168/PUU-XXI/2023 change the way PP 35/2021 is read?

Constitutional Court ruling 168/PUU-XXI/2023, delivered on 31 October 2024, changed how Law 13/2003 as amended by Law 6/2023, the parent law of PP 35/2021, must be read. The points that matter most to workers:

• a PKWT may last at most 5 years including extensions, and must be written in Indonesian and Latin script (rulings 4 and 5);
• weekly rest includes the option of 2 days for a 5-day week (ruling 7);
• if bipartite talks fail, dismissal may only happen after a final and binding decision of the industrial dispute body (ruling 20); and
• the severance table in Article 156(2) is read as a minimum, not a fixed amount (ruling 22).

Will PP 35/2021 be replaced?

Probably, but not yet. The DPR and the Government approved the Labour Protection Law (UU Pelindungan Ketenagakerjaan) in a plenary session on 6 October 2026. It has no number yet, has not been promulgated, and its text is not public. Until the new law and its implementing regulations take effect, PP 35/2021 still applies. We track the changes at Indonesia's new labour law.

• Kemnaker help centre and call centre

  1500630 bantuan.kemnaker.go.id