When the pandemic struck, an IT startup in Jakarta faced a sudden shift: its employees could no longer come to the office. Within weeks, management rolled out a Work From Home (WFH) policy. Surprisingly, productivity rose, but so did challenges — from overtime disputes to data security concerns. This story reflects what many companies in Indonesia have faced as remote work moves from being an emergency solution to a permanent fixture.

Legal Framework for Remote Work in Indonesia

Indonesia’s labor law does not explicitly regulate WFH or remote work. However, the Ministry of Manpower issued Circular Letter No. M/3/HK.04/III/2020 during the pandemic, encouraging flexible arrangements. While not binding law, it set the foundation for companies to adopt WFH responsibly.

Key points to remember:

• Employment agreements and company regulations should clearly define WFH arrangements, including working hours, responsibilities, and monitoring.
• Overtime rules (UU Ketenagakerjaan & Omnibus Law/UU Cipta Kerja) still apply to remote workers. Employers must record hours and pay overtime if employees exceed standard limits.
• Occupational safety obligations (K3) extend to WFH, meaning employers must ensure that employees work in safe environments, even at home.

Real Case in Indonesia

In 2021, a dispute arose when a group of employees in a financial services firm claimed unpaid overtime during WFH. The employer argued that WFH blurred boundaries, making time-tracking difficult. The case reached mediation at the local manpower office, which reminded the employer that remote work does not eliminate labor rights, including overtime pay. The firm was advised to install time-tracking software and revise its policies.

Best Practices for Employers

1. Update contracts and policies – Clearly define remote work terms, including hours, equipment, and performance standards.
2. Invest in digital tools – Use reliable platforms for communication, attendance, and project tracking.
3. Address data privacy – With Indonesia’s PDP Law (UU No. 27/2022) in effect, employers must safeguard employee and company data during WFH.
4. Balance flexibility and compliance – Allow flexibility while ensuring adherence to labor laws, especially regarding leave, overtime, and health coverage.
5. Promote culture integration – Remote work can weaken company culture. Regular check-ins, virtual events, and clear communication help maintain team cohesion.

Conclusion

Remote work in Indonesia is here to stay, but without clear policies, it can easily lead to disputes. Employers who combine legal compliance, digital readiness, and cultural integration will be better positioned to thrive in this evolving landscape.

References

• Ministry of Manpower Circular Letter No. M/3/HK.04/III/2020 on Work from Home Arrangements
• Law No. 13/2003 on Manpower (as amended by the Omnibus Law/UU Cipta Kerja, Law No. 11/2020)
• Law No. 27/2022 on Personal Data Protection (PDP Law)
• Case notes and mediation summaries from the Jakarta Manpower Office (2021)