Bankruptcy of a company brings about changes in the legal position of workers, from initially being subjects of an employment relationship to becoming creditors in bankruptcy proceedings. Under the Indonesian legal system, workers are classified as preferential creditors who have priority in the payment of wages and other normative rights, as wages constitute the primary source of livelihood for workers and their families. This study aims to examine the legal position of workers as preferential creditors in the distribution of bankruptcy assets and to assess the effectiveness of legal protection of wage rights in bankruptcy proceedings. This research employs a normative legal research method using a statutory approach, conceptual approach, and case approach. The results show that although the protection of workers’ rights is regulated under the Manpower Law, Bankruptcy Law, Civil Code, and reinforced by Constitutional Court Decision Number 67/PUU-XI/2013, its implementation still faces several obstacles, including limited bankruptcy assets, high bankruptcy administration costs, the dominance of secured creditors, and inconsistent application of payment priority principles. Therefore, harmonization of laws and regulations, as well as strengthening legal protection mechanisms, is necessary to ensure that workers’ wage rights are fulfilled fairly, optimally, and effectively.
Copyrights © 2026