The development of Artificial Intelligence (AI) is changing labor relations through the automation of tasks and the use of algorithmic management in recruitment, supervision, performance evaluation, and labor decision-making. These changes raise questions about the adequacy of Indonesian labor laws in protecting workers when decisions that impact their rights are increasingly mediated by algorithms. This study aims to analyze regulatory gaps in the use of AI in employment relations and formulate a legal reformulation model that is able to balance technological innovation with the protection of workers' rights. The research uses normative legal methods with legislative, conceptual, comparative, and policy analysis approaches, through qualitative analysis of national regulations, legal doctrines, academic literature, and international documents. The results show that Indonesian law has not comprehensively regulated algorithmic transparency, AI-based discrimination, worker data protection, the right to an explanation, human examination, and accountability for automated decisions. The study recommends human-in-command-based reformulation, algorithmic accountability, algorithmic impact assessment, data protection, human review, reskilling, and social dialogue. The framework is needed to ensure that AI transformation takes place in an innovative manner that is at the same time fair, accountable, and oriented towards worker protection.
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