Enhancing Indonesia’s Unemployment Insurance Program
Authors
On 7 February 2025, President Prabowo Subianto enacted the Government Regulation No. 6 of 2025 concerning the Amendments to Government Regulation No. 37 of 2021 on the Implementation of the Unemployment Insurance Program (Jaminan Kehilangan Pekerjaan – “JKP”) (“GR 6/2025”). These reforms, administered by the BPJS Ketenagakerjaan, aim to strengthen Indonesia’s social security framework by enhancing financial support and expanding access to job training for workers.
This ARMA Update outlines the key changes introduced by GR 6/2025.
Adjustment of JKP Contribution Rate
GR 6/2025 reduces the JKP monthly contribution rate from 0.46% to 0.36% of employee’s monthly wages. Additionally, the wage used for the contribution calculations is based on the last reported wage submitted by the employer to BPJS Ketenagakerjaan, subject to a maximum wage cap of IDR 5,000,000 (five million rupiah).
JKP Cash Benefits
Previously, JKP cash benefit received by ex-employees was provided for a maximum of 6 (six) months, with 45% of the employee’s wage for the first three months; followed by 25% of the for the subsequent three months. However, under GR 6/2025, cash benefits are now at a flat 60% of the employee’s wages for up to 6 (six months).
Change in Qualifications for Job Training Institutions
The JKP program offers competency-based job training to help workers enhance their skills and improve employability. Training can be conducted online and/or in person through government or private training institutions, as well as company-run training programs.
A significant regulatory shift in GR 6/2025 is the removal of the ministerial approval requirement for training providers. The updated qualification for job training institutions are as follows:
- Offer training aligned with Indonesian (national), international, or industry-specific competency standards
- Be registered and verified in the Manpower Information System
- Be accredited by the accreditation agency for vocational training institutions as evidenced by a certificate of accreditation.
The role of the Ministry of Manpower would mainly provide and oversee the implementation of the job training, while the funding will be determined by the Ministry of Finance.
Clarity on Payment of JKP Benefits due to Business Closure or Bankruptcy
Under the previous regulation, BPJS Ketenagakerjaan was responsible for covering JKP benefits for employees who have been terminated and whose JKP contributions remain unpaid by their employers for up to 3 (three) consecutive months. Following such coverage, the employers are then required to reimburse the outstanding amounts owed.
If JKP contributions remain unpaid beyond the initial 3-month period, the obligation to provide JKP benefits shifts to the employer. In this matter, the employer may request reimbursement from BPJS Ketenagakerjaan for the amounts paid, however this does not erase the obligation of the employer to pay the outstanding amounts of the JKP contributions.
In relation to this, GR 6/2025 introduces additional provisions for cases where a company fails to meet its JKP Contributions due to bankruptcy or closure. In such cases, if the company is unable to meet its JKP contributions for a period of up to 6 (six) months, BPJS Ketenagakerjaan will assume responsibility for paying the JKP Benefits.
However, even in cases of business closure or bankruptcy, the employer or company remains legally obligated to settle any outstanding JKP contribution arrears, as well as applicable fines, under the employment social security program administered by BPJS Ketenagakerjaan.
Extension Period for JKP Benefits Entitlement
To improve accessibility, the deadline for terminated employees to apply for JKP benefits has been extended from three months to six months from their termination date, offering greater flexibility for affected workers.
Conclusion
With the aforementioned changes, GR 6/2025 enhances flexibility while reaffirming employer obligations in the JKP benefits payment process. The regulation ensures that terminated employees receive the necessary support to reintegrate into the workforce and improve their employability.
Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.
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