Indonesia’s Manpower Minister issues firm directive prohibiting companies from retaining workers’ personal documents.

In a decisive move to protect workers’ rights, Indonesia’s Minister of Manpower has officially banned companies from holding employees’ diplomas and personal documents. The new policy reaffirms the government’s commitment to fair labor practices across the archipelago

Landmark Regulation Issued

On May 20, 2025, Indonesia’s Minister of Manpower, Yassierli, officially issued Ministerial Circular Letter No. M/5/HK.04.00/V/2025, formally prohibiting companies from retaining the original diplomas and personal documents of their employees. The regulation is designed to prevent coercive employment practices that restrict workers’ mobility and rights.

Key Points of the Directive

The directive outlines several critical elements:

– Employers cannot require or keep diplomas or personal documents (e.g. certificates, passport, birth certificate, marriage book, vehicle papers) as job collateral.

– Employers must not block workers from finding better job opportunities.

– Workers should read contracts carefully, especially clauses about handing over diplomas or documents.

– Exceptions only apply if:

– Training was funded by the employer under a written agreement, and

– The employer secures the documents and pays compensation if lost or damaged.

Why This Ban Was Urgently Needed

The policy responds to long-standing complaints from workers who were forced to surrender documents as a condition of employment. This led to unequal power dynamics, restricted employee mobility, and, in many cases, economic entrapment.

Exceptions and Company Obligations

The Ministry allows an exception exists in specific circumstances—such as when an employer finances an employee’s education or training. In such cases, the company may temporarily hold the diploma, but only under a written employment agreement. The employer must guarantee the document’s safety, and if it is lost or damaged, the company bears full responsibility.

Regional and Cross-Border Implications

The regulation may significantly impact labor practices in industrial zones such as Batam and Bintan—regions often interacting with Singaporean investors and companies. Singapore-based businesses operating in Indonesia must now realign their HR policies to remain compliant with the updated rule.

Indonesia’s firm stance on banning the retention of employee diplomas underscores a wider push toward ethical labor reform and corporate accountability. As the region’s labor markets grow more competitive, this policy may inspire similar protections and encourage businesses to prioritize human dignity and fair treatment in hiring practices

Sources: CNN Indonesia (2025) , Metro TV News (2025) , CNBC Indonesia (2025)

Keywords: Manpower Minister, Diploma Ban, Employee Protection, Labor Regulation, Indonesia Policy