This is Severance Pay for Employees Affected by Layoffs under the Job Creation Perppu.

President Joko Widodo (Jokowi) enacted Government Regulation in Lieu of Law (Perppu) Number 2 of 2022 concerning Job Creation on December 30, 2022.

This Perppu is a revision of Law Number 11 of 2020 concerning Job Creation, which was declared conditionally unconstitutional by the Constitutional Court through Decision Number 91/PUU-XVIII/2020 dated November 25, 2021.

The Job Creation Perppu re-regulates several matters, one of which is the amount of severance pay for employees who experience termination of employment (PHK).

"In the event of termination of employment, the employer is obligated to pay severance pay and/or service award and compensation for rights that should have been received," as written in Article 81, point 47 of the Job Creation Perppu, which amends Article 156 of Law Number 13 of 2003 concerning Manpower.

The following are the provisions for the amount of severance pay in Article 81, point 47 of the Job Creation Perppu:

* Less than 1 (one) year of service, severance pay is 1 (one) month's salary;
* 1 (one) year or more but less than 2 (two) years of service, severance pay is 2 (two) months' salary;
* 2 (two) years or more but less than 3 (three) years of service, severance pay is 3 (three) months' salary;
* 3 (three) years or more but less than 4 (four) years of service, severance pay is 4 (four) months' salary;
* 4 (four) years or more but less than 5 (five) years of service, severance pay is 5 (five) months' salary;
* 5 (five) years or more but less than 6 (six) years of service, severance pay is 6 (six) months' salary;
* 6 (six) years or more but less than 7 (seven) years of service, severance pay is 7 (seven) months' salary;
* 7 (seven) years or more but less than 8 (eight) years of service, severance pay is 8 (eight) months' salary;
* 8 (eight) years or more of service, severance pay is 9 (nine) months' salary.

Furthermore, this new Perppu defines 'job creation' as an effort to create jobs through ease of doing business, protection, and empowerment of cooperatives and micro, small, and medium enterprises, improvement of the investment ecosystem and ease of doing business, and Central Government investment and acceleration of national strategic projects.