How Does UU 6/2023 Amend Job Creation Law Provisions?

1.0 The Ratification Framework: From Unconstitutional Law to Emergency Regulation to Statute

UU 6/2023 formally ratifies Government Regulation in Lieu of Law (Peraturan Pemerintah Pengganti Undang-Undang/PERPPU) Number 2 of 2022 concerning Job Creation (Cipta Kerja), converting the emergency regulation into permanent legislation. The law was enacted on March 31, 2023, in direct response to the Constitutional Court's November 2021 decision (Putusan Nomor 91/PUU-XVIII/2020) that declared the original Job Creation Law (UU 11/2020) "conditionally unconstitutional" (inkonstitusional bersyarat). Article 1 of UU 6/2023 states: "Peraturan Pemerintah Pengganti Undang-Undang Nomor 2 Tahun 2022 tentang Cipta Kerja (Lembaran Negara Republik Indonesia Tahun 2022 Nomor 238, Tambahan Lembaran Negara Republik Indonesia Nomor 6841) ditetapkan menjadi Undang-Undang dan melampirkannya sebagai bagian yang tidak terpisahkan dari Undang-Undang ini" (Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation is established as Law and attached as an inseparable part of this Law). President Joko Widodo issued PERPPU 2/2022 on December 30, 2022, exercising emergency legislative powers under Article 22 paragraph (1) of the 1945 Constitution, to immediately address the legal vacuum created by the Court's decision while the DPR prepared to review the revised provisions. This legislative sequence reflects Indonesia's constitutional crisis management mechanism: when the Court invalidates legislation but grants a grace period for correction, the executive may issue emergency regulations that subsequently require parliamentary ratification. UU 6/2023 thus represents the formal parliamentary endorsement of the revised omnibus law framework (see Matrix 1.1 below).

Matrix 1.1: Legislative Evolution of Job Creation Law Framework Under UU 6/2023

2.0 The Structural Architecture: 186 Articles Across 15 Chapters and 77 Laws

The ratified PERPPU 2/2022 (now UU 6/2023 Lampiran) consists of 186 articles organized into 15 chapters (Bab), amending or replacing provisions from 77 existing sectoral laws. This represents a reduction from UU 11/2020's coverage of 78 laws, with the removal of certain taxation provisions. Article 2 of UU 6/2023 specifies: "Undang-Undang ini mulai berlaku pada tanggal diundangkan" (This Law comes into effect on the date of promulgation), establishing immediate enforceability upon publication in State Gazette Number 41 of 2023. The omnibus law structure clusters related regulatory reforms into thematic chapters: Job Creation Foundations (Chapter I), Investment Facilitation (Chapter II), Ease of Doing Business (Chapter III), Labor (Chapter IV, Articles 81-88), Natural Resources Management (Chapter V), Administrative Simplification (Chapter VI), Land Affairs (Chapter VII), Economic Zones (Chapter VIII), State Investment (Chapter IX), Government Projects (Chapter X), Business Licensing (Chapter XI), Supervision and Enforcement (Chapter XII), Other Provisions (Chapter XIII), Transitional Provisions (Chapter XIV), and Closing Provisions (Chapter XV). The most substantive amendments occur in the Labor chapter, where PERPPU 2/2022 deleted at least 28 articles from UU 13/2003 (Labor Law) while adding new provisions on outsourcing limitations, wage calculation methodologies, and fixed-term employment contracts (PKWT). The 1,117-page omnibus structure, though reduced from UU 11/2020's 1,187 pages, maintains comprehensive cross-sectoral regulatory integration aimed at streamlining investment approvals and employment regulations (see Matrix 2.1 below).

Matrix 2.1: UU 6/2023 Omnibus Law Structural Framework

3.0 The Labor Law Amendments: Outsourcing, Fixed-Term Contracts, and Wage Provisions

The most significant and controversial amendments in UU 6/2023 concern labor law provisions. The original UU 11/2020 removed limitations on outsourcing, effectively allowing all types of work to be outsourced. PERPPU 2/2022, responding to Constitutional Court concerns and labor union objections, reinstated partial restrictions: outsourcing is now limited to "certain supporting work" (pekerjaan penunjang tertentu), with detailed scope to be regulated through Government Regulation. This represents a compromise between business flexibility demands and worker protection principles. On fixed-term employment contracts (Perjanjian Kerja Waktu Tertentu/PKWT), Article 56 ayat (3) in Article 81 angka 12 of the Lampiran establishes that PKWT duration cannot exceed five years, including extensions, addressing Constitutional Court concerns that unlimited-term temporary contracts violated constitutional worker protections. The Court's decision 91/PUU-XVIII/2020 specifically ruled this provision "bertentangan dengan UUD 1945 sepanjang tidak dimaknai 'Jangka waktu selesainya suatu pekerjaan tertentu dibuat tidak melebihi paling lama 5 (lima) tahun, termasuk jika terdapat perpanjangan'" (contradicts the 1945 Constitution unless interpreted as "Duration of certain work completion shall not exceed a maximum of 5 years, including if there are extensions"). Regarding wages, Article 90 of UU 13/2003, which prohibited employers from paying below minimum wage, was deleted from the original omnibus law but partially restored in PERPPU 2/2022 with refinements to minimum wage calculation methodologies based on economic indicators and regional purchasing power. The labor amendments also deleted provisions for long leave (cuti panjang) of two months for workers with six years of service, and removed the weekly two-day rest provision for five working days, retaining only one day of rest for six working days per week. These changes reflect the legislative balancing act between attracting investment through labor flexibility and maintaining constitutional worker protections against exploitation (see Matrix 3.1 below).

Matrix 3.1: Labor Law Amendments in UU 6/2023 (PERPPU 2/2022 Ratification)

4.0 The Investment and Business Licensing Reforms: Risk-Based Supervision

Beyond labor law, UU 6/2023 introduces significant investment facilitation and business licensing simplifications. The law replaces the previous sectoral licensing system with a risk-based business licensing framework (Perizinan Berusaha Berbasis Risiko), where business activities are classified as low, medium, or high risk, determining the level of regulatory scrutiny and permit requirements. Low-risk businesses require only online registration through the Online Single Submission (OSS) system, while high-risk activities undergo comprehensive environmental, safety, and health assessments. Article 180 of the Lampiran addresses regulatory consistency, stating that implementing regulations (peraturan pelaksanaan) from UU 11/2020 remain valid unless contradictory to PERPPU 2/2022, ensuring regulatory continuity during the transition period. For micro and small enterprises (MSMEs), Article 91(2) amendments to UU 20/2008 simplify business permit requirements: MSMEs no longer need neighborhood-level (RT) business certificates, requiring only national identity card (KTP) registration through online or offline channels. The law also streamlines halal product certification for MSMEs under UU 33/2014, reducing certification timelines to one working day for fatwa committee decisions after Halal Product Process (PPH) assistance completion within 10 working days of application. Land rights provisions for investment purposes are clarified, with extended land use rights (Hak Guna Usaha/HGU) and building use rights (Hak Guna Bangunan/HGB) available for longer durations to provide investment certainty for infrastructure and industrial projects. The elimination of Articles 182-183 from UU 11/2020, which required Central Government consultation with DPR/DPD for regional regulation formation, represents a decentralization adjustment addressing constitutional separation of powers concerns (see Matrix 4.1 below).

Matrix 4.1: Investment and Business Licensing Reforms Under UU 6/2023

5.0 The Implementation Framework: Transitional Provisions and Regulatory Hierarchy

Chapter XIV (Transitional Provisions) and Chapter XV (Closing Provisions) establish the implementation framework for the omnibus law transition. Article 184 of the Lampiran specifies that all implementing regulations issued under UU 11/2020 remain valid and enforceable unless they contradict PERPPU 2/2022 provisions, requiring case-by-case regulatory review and amendment through Government Regulations and Ministerial Regulations. This transitional mechanism prevents regulatory vacuum while enabling gradual alignment of hundreds of sectoral implementing regulations. Article 185 mandates that sector-specific implementing regulations must be issued within two years of UU 6/2023's enactment, creating deadlines for ministries to translate omnibus framework provisions into operational guidelines. Article 186 contains the standard closing provision: "Undang-Undang ini mulai berlaku pada tanggal diundangkan" (This Law comes into effect on the date of promulgation). The regulatory hierarchy established places UU 6/2023 as lex generalis (general law) relative to sectoral laws, meaning that in cases of conflict, the omnibus law provisions prevail unless explicitly stated otherwise. For constitutional challenges, the law recognizes the binding nature of Constitutional Court decisions, particularly the interpretive conditions (syarat konstitusional) imposed on specific articles like PKWT duration limits and supervisory authority definitions. Enforcement mechanisms remain sector-specific, with administrative sanctions, criminal penalties, and civil liabilities distributed across the 77 amended laws based on violation types. The law does not create new enforcement agencies but relies on existing ministerial supervisory bodies and the Coordinating Ministry for Economic Affairs for inter-sectoral coordination on omnibus law implementation (see Matrix 5.1 below).

Matrix 5.1: Implementation and Transitional Framework Under UU 6/2023

Regulation Reference

Full Citation:
Undang-Undang Nomor 6 Tahun 2023 tentang Penetapan Peraturan Pemerintah Pengganti Undang-Undang Nomor 2 Tahun 2022 tentang Cipta Kerja Menjadi Undang-Undang

English Translation:
Law Number 6 of 2023 on Establishment of Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation as Law

Short Citation:
UU 6/2023

Legal Basis: UUD 1945 (Pasal 5 ayat (1), Pasal 20, Pasal 22 ayat (2)); PERPPU 2/2022; Putusan Mahkamah Konstitusi Nomor 91/PUU-XVIII/2020

Official Source: https://peraturan.bpk.go.id/Details/246523/uu-no-6-tahun-2023

Legal Analysis by the CRPG Regulatory Framework Team | Analysis Date: November 26, 2025 | Regulation Status: Active (Berlaku)

LEGAL DISCLAIMER: This article is provided for informational and educational purposes only and does not constitute legal advice, legal opinion, or professional consultation. The analysis presented herein is based on the authors' interpretation of UU 6/2023 and related regulations as of the publication date and may contain errors, omissions, or inaccuracies despite reasonable efforts to ensure accuracy. Laws and regulations are subject to amendment, judicial interpretation, and administrative clarification that may affect the applicability or interpretation of the provisions discussed. This article does not create an attorney-client relationship between the authors, the Center for Regulation, Policy and Government (CRPG), and any reader. Readers should not act or refrain from acting based solely on the information contained in this article without seeking appropriate legal counsel from qualified Indonesian legal practitioners licensed to practice labor, administrative, and constitutional law. The application of Job Creation Law provisions depends on specific implementation contexts including sectoral regulations, business classifications, employment relationships, and Constitutional Court interpretations, all of which require case-specific legal analysis. Neither the authors nor CRPG assume any liability for actions taken or not taken based on information in this article, nor for any direct, indirect, incidental, consequential, or punitive damages arising from use of or reliance on this material. For specific legal guidance on omnibus law compliance, labor relations, investment licensing, or constitutional challenges, consult with qualified legal counsel familiar with Indonesian labor law, administrative law, and constitutional litigation.

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Law Database

Access UU 6/2023 in the CRPG Law Database: UU 6/2023