INTRODUCTION

On 30 April 2026, just ahead of May Day, the Minister of Manpower enacted Minister of Manpower Regulation No. 7 of 2026 on Outsourcing (“MOM Regulation 7/2026”). The regulation was introduced as a direct response to Constitutional Court Decision No. 168/PUU-XXI/2023, which required the government to clearly define the scope of permissible outsourcing activities following the removal of Article 65 of Law No. 13 of 2003 on Manpower under the Job Creation framework.

CONCLUSION

MOM Regulation 7/2026 represents a major regulatory shift in Indonesia’s outsourcing regime. By narrowing the scope of permissible outsourced activities and introducing broader accountability obligations, the government has signaled a more stringent approach toward outsourcing compliance and worker protection.

While the regulation provides greater clarity in certain areas, significant interpretative and operational risks remain, particularly regarding the broad classification of “operational support services.”

Businesses should therefore move beyond formal job classifications and undertake a substantive review of their outsourcing practices, operational structures, and contractual arrangements. Companies that proactively utilize the transition period to realign their outsourcing models will likely be better positioned to maintain operational continuity while minimizing regulatory and commercial risks.

Regards, 

Pasaka Rievan Smith
Counsellors at Law 

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