Facing a layoff: severance rights, Job Loss Insurance, and your next steps

Resmi.ID Team · 4 min read · Updated 29 Oct 2026

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The correct layoff procedure

Under PP 35/2021, the employer must give the intention and reason for the layoff in a written notice at least 14 working days beforehand, or 7 working days if you're still on probation.

If you disagree, write a rejection letter with your reasons within 7 working days of receiving the notice. The dispute is then settled through bipartite negotiation and, if that fails, through the industrial relations dispute process, such as mediation at the local manpower office.

What permanent employees are owed

Permanent employees (PKWTT) who are laid off are entitled to severance pay (uang pesangon), a long-service award (UPMK), and compensation for rights (UPH), under Article 156 of the Manpower Law as amended by the Job Creation Law.

1. 1Severance payFrom 1 month's wage for less than 1 year of service, rising in steps to 9 months' wages for 8 years or more.
2. 2Long-service award (UPMK)From 3 years of service, i.e. 2 months' wages for 3 to under 6 years, rising in steps to 10 months' wages for 24 years or more.
3. 3Compensation for rights (UPH)Including untaken annual leave that hasn't lapsed, and travel costs home to where you were hired.

The final amount depends on the reason for the layoff, because PP 35/2021 sets different multipliers. For example, a layoff for efficiency because the company is making losses, or due to bankruptcy, uses a 0.5 multiplier for severance, while other reasons may use 1 or more. For micro and small businesses, the amount is set by agreement.

If you're on a fixed-term contract

Fixed-term (PKWT) employees don't receive severance, but are entitled to compensation pay when the contract ends, provided they've worked at least 1 month continuously. If the contract is ended early, reread the termination clause in your employment agreement.

Job Loss Insurance (JKP)

JKP is a BPJS Ketenagakerjaan programme for workers who are laid off. Since PP 6/2025, the cash benefit is 60% of wages for up to 6 months, with a wage cap of Rp5,000,000. Besides cash, it includes access to labour market information and job training from the government.

1. 1Check membershipJKP requires at least 12 months of contributions within 24 months.
2. 2Prepare documentsThe layoff letter or proof of layoff, ID card (KTP), and BPJS Ketenagakerjaan card.
3. 3Apply via SIAPkerjaReport and submit the claim at siapkerja.kemnaker.go.id.
4. 4Mind the deadlineClaims must be filed within 6 months of the layoff.
5. 5Meet the obligationsComplete the assessment, job services, and training required.

You can lose the right to JKP, for example if you don't claim within 6 months or you've already found a new job. JKP is also different from Old-Age Savings (JHT), which has its own withdrawal rules.

Questions to ask HR

• What is the official reason for the layoff, and which provision is it based on?
• What is the breakdown of my severance, long-service award, and compensation for rights, and which wage is used as the basis?
• When will these be paid, and in a single payment?
• When will my BPJS Ketenagakerjaan membership be deactivated, and will the company report the layoff for JKP purposes?
• Can I get a certificate of employment (paklaring)?

Record and keep evidence

• The layoff notice and all your replies.
• Your employment contract, appointment letter, and company regulations.
• Payslips from recent months as the basis for calculating wages.
• Records of remaining leave and proof of BPJS membership.

Planning your next steps

Once your entitlements are sorted, give yourself a few days to breathe. Then make a simple plan: work out how many months of expenses your severance and JKP can cover, update your CV, and set a weekly application target.

On KarirResmi, you can create saved searches so matching new jobs are sent to you via WhatsApp or email, and track the status of each application on a timeline. Companies with a Verified badge have had their NIB (business ID) matched against licensing records.

When an interviewer asks why you left, answer honestly and briefly: "The company restructured for efficiency and my role was one of those removed. While there I handled 40 clients, and I want to bring that experience here." A layoff for efficiency is nothing to be ashamed of.

Note that the DPR passed the Labour Protection Law on 6 October 2026 with a one-year transition period. Layoff and severance rules may change after that, so always check the latest provisions on Kemnaker's official channels.

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