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  • Kajian Vol.10: Labour Economics – The Vulnerability of Fixed-Term Contract Workers in Indonesia

Kajian Vol.10: Labour Economics – The Vulnerability of Fixed-Term Contract Workers in Indonesia

  • Ekonomi Publik, Ekonomika Kependudukan, Ekonomika Ketenagakerjaan, Kajian, Penelitian
  • 27 Oktober 2025, 12.23
  • Oleh: sarahgratiarabingalingging
  • 0

Authors:

Raniah Salsabila, Owen Alberto Liem, Nadya Zahra Prasetio, Nawfal Aulia, Qisha Quarina

Bidang Kajian Microeconomics Dashboard 2025


Executive Summary

  • In Indonesia, work agreements are divided into 2 (two), i.e. fixed-term contract (Perjanjian Kerja Waktu Tertentu/PKWT) and indefinite-term contract (Perjanjian Kerja Waktu Tidak Tertentu/PKWTT).
  • The implementing regulations for work agreements are contained in the Law No. 13/2003 on Employment, which was later amended through Law No. 11/2020 on Job Creation or the Omnibus Law, and Government Regulation No. 35/2021.
  • There are differences between the two work agreements, i.e. the length of service, nature of work, employment rights, and employment protection for workers.
  • Despite being eligible to the same social protection programs, fixed-term contract workers are prone to risks due to the limited nature of the work agreement, lack of labour regulations, restricted social program coverage, and susceptibility to income exploitation.
  • Specifically, only a small portion of PKWT workers are covered by employment insurance programs despite being eligible for the programs, indicating the mismatch between regulations and company policies.
  • Demographically, PKWT workers tend to be younger and less educated than the PKWTT workers.
  • The number of workers experiencing termination of employment has increased from year to year with PKWT workers being more vulnerable to termination of employment.
  • In addition, compared to the PKWTT workers, the PKWT workers have a higher percentage of no engagement in the labour union, implying that PKWT workers have a lower incidence of social dialogue in the labour market.
  • Lastly, most PKWT workers lie within the lower income deciles (within the 1st-5th decile), placing them in a financially vulnerable segment of society.

FULL VERSION: Kajian-Vol.10

Tags: SDG 10: Berkurangnya Kesenjangan SDG 16: Perdamaian Keadilan dan Kelembagaan yang Tangguh SDG 8: Pekerjaan Layak dan Pertumbuhan Ekonomi SDGs

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Universitas Gadjah Mada

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