ILO, UGM Urge Adaptive Protection for Indonesia's Informal Workers as 30% of Formal Staff Lack Contracts
Updated
Updated · ugm.ac.id · May 25
ILO, UGM Urge Adaptive Protection for Indonesia's Informal Workers as 30% of Formal Staff Lack Contracts
1 articles · Updated · ugm.ac.id · May 25
Indonesia’s social protection system still leaves many informal workers exposed, prompting ILO and UGM experts to press for coverage based on work performed rather than formal employment status.
Platform workers, freelancers and content creators are expanding faster than regulations can adapt, while unstable incomes make standard monthly contribution schemes hard to sustain.
UGM researchers said Indonesia already has numerous rules for digital workers, but weak implementing institutions leave ride-hailing drivers and other platform workers vulnerable in practice.
About 30% of formal-sector workers still lack verbal or written contracts, underscoring that informality now extends beyond the informal sector into formal companies.
ILO and labor-law experts said revising Indonesia’s employment definitions is crucial so social protection, wages and basic labor rights can cover millions in newer forms of work.
Beyond legal status, should Indonesia regulate the algorithms that dictate gig workers' pay and daily tasks?
Can Indonesia's new bill protect gig workers if they are still legally considered 'partners' and not employees?
Navigating Indonesia’s 57% Informal Workforce: Legal, Social, and Technological Reforms for the Gig Economy
Overview
In early 2026, Indonesia’s labor market reflects a global shift toward informal work and the expanding gig economy, driven by technological advances and remote work. While Indonesia’s unemployment rate has dropped below 5 percent and the working-age population continues to grow, most new jobs are informal or platform-based. This trend is reshaping employment patterns, challenging traditional labor laws, and raising concerns about worker welfare and social protection. The report highlights the urgent need for policy reform and innovative solutions to ensure that economic growth leads to quality jobs and fair opportunities for all workers.