From The Jakarta Globe:
Indrasari Tjandraningsih, a researcher at Akatiga Social Research Center, a nongovernmental research organization, said the 2003 Labor Law formally legalized outsourcing — the local term for contracting employees who are hired from outside firms.
“The outsourcing system is very problematic. Amid the increase of open unemployment in the past five years, outsourcing has become one of the answers for workers who do not get in the formal markets,” Indrasari said.
She said outsourcing can cause pay disparity among employees doing the same job, depending on whether they have been permanently hired.
“Outsourced workers’ salaries are on average 26 percent lower than the permanent workers,” she said.
She added that outsourced workers also face discrimination based on their marital status, as companies are required to cover certain spouse-related costs, along with restrictions on joining unions.
“Akatiga research in industrial centers in West Java, East Java and Riau Islands in 2010 showed that outsourcing work tends to harm workers and it also had not shown job [advancement] opportunities,” she said.