Hundreds of demonstrators gathered near the presidential palace in central Jakarta, shouting and throwing stones. Police fired tear gas and water cannon in an attempt to disperse the crowd, Reuters witnesses said.
The "omnibus" jobs creation bill, passed into law on Monday, has seen thousands of people across the world's fourth-most populous nation take to the streets in protest against legislation they say undermines labour rights and weakens environmental protections.
"This is our struggle for our children and grandchildren, and our future generations... If it's like this our well-being will decrease, and we will lack job certainty," Maulana Syarif, 45, who has worked at Astra Honda motors for 25 years, told Reuters in Jakarta.
Around 1,000 protesters have been detained in Jakarta and more than 100 others arrested in other cities, according to police spokespeople. At least two students have been hospitalised with head injuries, and six police officers hurt.
"I feel a responsibility to the Indonesian people," said another demonstrator, IT student Arawinda Kartika, as she marched toward the palace. "I feel sorry for labourers working day and night without sufficient wages or power."
Labour union leader Jumisi called for protests to continue until the law was repealed, extending unions' initial plan for a three-day national strike ending Thursday.
Television channels showed demonstrations in multiple cities across the country, including in remote areas such as North Maluku, where people carried coffins and held mock funerals to mark the "death" of parliament.
Black smoke rose across the capital on Thursday afternoon as protesters burned public transport facilities and damaged police posts. The operator of Jakarta's MRT rail network said underground stations had been closed.
Protesters blocked a toll road in West Java and set fire to a cafe in Yogyakarta province, media reported.
Two provincial governors urged the president to issue an emergency decree to cancel the law, they said in their social media accounts.
The government of President Joko Widodo has championed the legislation as key to boosting Indonesia's ailing economy by cutting red tape and attracting more foreign direct investment.
Bahlil Lahadalia, the head of Indonesia's Investment Coordinating Board, appealed to young people to trust the government's intent.
"Please be assured this law is to create jobs for the unemployed Indonesian people," he said.
