Indonesia's Employment Protection Law: A Bali Employer Checklist

TL;DR

Indonesia's Employment Protection Law, Law No. 27 of 2026, gives employers in Bali a reason to review their employment documents carefully.

---

The Facts

Indonesia's Employment Protection Law, Law No. 27 of 2026, gives employers in Bali a reason to review their employment documents carefully. For foreign-owned PT PMA businesses, the practical starting point is the employment relationship and the work being performed, rather than the nationality of the shareholder.

Facts: the effective date matters

The official BPK legal register records promulgation and commencement on 28 October 2026. A later news report or upload date must not be used as the commencement date. Article 313 states that the law takes effect on promulgation.

Article 82(2) provides for a fixed-term employment agreement of up to two years, with two extensions of up to one year each. Article 82(3) requires written notice of an intended extension at least seven days before expiry. This does not make every job eligible for a fixed-term contract: Article 87 distinguishes qualifying temporary work from work of a permanent nature.

Article 138 links minimum-wage setting to decent living needs, economic conditions and employment. This provision does not itself supply a new rupiah wage amount for every Bali workplace.

In practice: review each employment file

Build a register showing each employee's actual role, employment category, original start date, contract expiry and extension history. Compare the written role with the work actually done. Keep copies of signed agreements and notices together so that a renewal decision is based on the complete history.

Do not treat an English-only template or the phrase “contract staff” as a substitute for reviewing the statutory requirements. Article 83 requires written fixed-term agreements in Indonesian using Latin script; where bilingual versions differ in interpretation, the Indonesian version prevails.

Existing contracts and outsourcing need separate treatment

The law's transition provisions should not be reduced to a blanket statement that all existing contracts are automatically cancelled or converted. Article 306 gives companies employing outsourced workers up to one year to adjust and preserves pre-existing outsourcing agreements until their expiry. That provision concerns outsourcing; it should not be applied indiscriminately to every direct employment contract.

Article 310 retains earlier implementing rules only insofar as they do not conflict with the new law. Article 312 sets a one-year deadline for implementing regulations. Employers should therefore identify the applicable provision before changing an existing worker's terms.

Bali Zero take

A useful compliance review separates new contracts, proposed renewals, existing agreements and outsourcing arrangements. For payroll budgeting, keep planning assumptions separate from the officially applicable provincial, district or sectoral wage decision. This article does not announce a 2027 Bali minimum-wage figure or predict a percentage increase.

Next steps

Prepare the employee register and flag upcoming renewals first. Review templates against the new law, document any required changes, and obtain case-specific employment advice before terminating or reclassifying a worker. A company should not reduce accrued rights on the strength of a headline.

Sources

• BPK legal register: Law No. 27 of 2026.
• Official law PDF: Articles 82, 83, 87, 138, 306 and 310–313.

Source checked on 9 November 2026. The commencement date is 28 October 2026.

---

Bali Zero Take

Our Analysis

A useful compliance review separates new contracts, proposed renewals, existing agreements and outsourcing arrangements. For payroll budgeting, keep planning assumptions separate from the officially applicable provincial, district or sectoral wage decision. This article does not announce a 2027 Bali minimum-wage figure or predict a percentage increase.

---

Next Steps

Original News Lead (Secondary Source)

go.kompas.com

---