Investment is one of the main strategies to encourage national economic growth in order to be able to create expansion of job opportunities for Indonesian workers so as to increase national development. The workforce has a very important role and position as an actor and as a development goal. Acceleration of national development can be done through selective employment of foreign workers with the requirements and restrictions on foreign workers to be employed through the determination of certain positions and certain times that can be occupied by foreign workers. This article will discuss the rights and obligations of companies in employing foreign workers and vice versa.
Governing law and regulation
- Law No. 13/2003 concerning Manpower as amended by Law No. 11/2020 concerning Job Creation
- Government Regulation (PP) No. 34/2021 concerning the Use of Foreign Workers
- Ministry of Manpower Regulation (Permenaker) No. 8/2021 concerning Implementing Regulation of PP No. 34/2021 concerning the Use of Foreign Workers
Overview
Employment is every person who is able to do work that produces goods or services and can be useful for the public as well as for himself. Employment or labor is also part of the factors of production, therefore the role of labor becomes important in every economic activity of the country. Foreign workers (TKA) according to PP No. 34/2021 are foreign citizens holding visas with the intention of working in Indonesian territory.
General rules about TKA
In PP No. 34/2021, it is regulated that employers of TKA must prioritize the use of Indonesian workers (TKI) in all types of available positions. However, TKA can occupy the position if the position cannot be occupied by the TKI. The use of TKA must also take into account the conditions of the domestic labor market.
There are several parties who can become employers of TKA including, government agencies, representatives of foreign countries, international agencies, foreign trade representative offices, representative offices of foreign companies, foreign news agencies conducting activities in Indonesia, foreign private companies operating in Indonesia, legal entities in the form of a limited liability company or foundation established under Indonesian law or a foreign business entity registered with the competent authority, social institutions, religious institutions, educational institutions, cultural institutions, impresario service businesses, advocate offices, and public accounting firms regulated in accordance with the law. Limited liability companies in the form of individuals are prohibited from employing TKA.
Employers can only employ TKA in an employment relationship for a certain position and for a certain time and have competencies that are in accordance with their position. These certain positions include positions at the level of commissioners, directors, managerial, and professionals by the determination of the Ministry of Manpower (MoM). Employers of TKA are prohibited from employing TKA in positions of managing personnel by the determination of the MoM.
Double job provision
Employers of TKA can employ TKA who are also being employed by other employers of TKA for the same position, namely as directors or commissioners. TKA can also hold concurrent positions in certain positions determined by the MoM in the vocational education and vocational training sector, the digital economy sector, and the oil and gas sector for cooperation contractors. The TKA must obtain prior approval from the employer of the first foreign worker. The second employer of the TKA can employ the TKA no longer until the end of the working period at the first employer of TKA. In the condition when the foreign worker is in the same company, the employer of the foreign worker is prohibited from employing TKA in multiple positions.
Mandatory Expatriate Placement Plan (RPTKA)
In employing TKA, employers of TKA are required to have an RPTKA approved by the MoM. The ratification of the RPTKA consists of:
- RPTKA for work is temporary. This contract is given for a maximum period of 6 months and cannot be extended
- RPTKA for work that is more than 6 months. This contract is given for a maximum period of 2 years and can be extended
- RPTKA for Compensation Fund for Employment of Foreign Workers (DKPTKA). This contract is given for a maximum period of 2 years and can be extended. This RPTKA is given to employers of TKA for government agencies, representatives of foreign countries, international agencies, social institutions, religious institutions and certain positions in educational institutions.
- RPTKA for Special Economic Zone (KEK). This contract is given for a maximum period of 5 years and can be extended. RPTKA KEK for the position of directors or commissioners is given once and is valid as long as the foreign worker serves as a director or commissioner.
Employers are required to employ TKA in accordance with the ratification of the RPTKA. The approval of this RPTKA will later be used as a recommendation for TKAto obtain visas and residence permits in the context of working.
The ratification of the RPTKA does not apply to directors or commissioners with certain share ownership, shareholders in accordance with statutory provisions, diplomatic and consular employees at representative offices of foreign countries. Directors and commissioners can obtain recommendations for granting visas and residence permits from non-MoM government agencies in charge of coordinating policies and services in the investment sector. Meanwhile, diplomatic and consular employees at representative offices of foreign countries can obtain visas and residence permits from the MoM who carries out government affairs in the field of foreign relations.
The ratification of the RPTKA also does not apply to TKA needed by employers of TKA in the types of production activities that are stopped due to emergencies, business visits, and research for a certain period of time. The foreign worker can enter and stay in Indonesia with a visa and residence permit in accordance with the provisions of the legislation in the field of immigration.
In addition, the ratification of the RPTKA does not apply to TKA with certain positions determined by the MoM in the type of technology-based and vocational start-up company activities for a maximum period of 3 months. More than this period, the employer of the foreign worker is required to have an RPTKA ratification. Even though they do not have RPTKA ratification, TKA can still get visas and residence permits in the context of working through the submission of TKA’s data with the requirements as stipulated in Article 33 of MoM Reg 8/2021 by the employer to the Director of Controlling the Employment of TKA (Direktur Pengendalian Penggunaan Tenaga Kerja Asing) via online.
Employers obligations
Employers are required to appoint TKI to assist TKA in the context of technology transfer and transfer of expertise from TKA. Employers of TKA are required to carry out education and job training for the accompanying workers in accordance with the qualifications of the positions of the assisted TKA. Employers are required to provide Indonesian language education and training facilities to TKA. These provisions do not apply to TKA who are directors, commissioners, heads of representative offices, foundation coaches, foundation administrators, foundation supervisors, and TKA who are employed for temporary work. After the work agreement of the TKA ends, the employer of the TKA is obliged to return the TKA to his origin country.
Social security and insurance for TKA
For foreign workers who have worked for more than 6 months, employers of foreign workers are required to register foreign workers in the national social security program. Meanwhile, for foreign workers who work less than 6 months, an insurance program will be registered with an insurance company that guarantees at least protection for this type of work accident risk.
Compensation Fund for Employment of Foreign Workers (DKPTKA)
Employers of foreign workers who employ foreign workers are required to pay DKPTKA in the amount of US$ 100 per position per person per month as Non-Tax State Revenue or regional income in the form of regional levies. Employers of foreign workers who employ foreign workers for less than 1 month are required to pay DKPTKA for 1 full month. DKPTKA payments are made in accordance with the RPTKA Ratification period and are paid in advance. DKPTKA payments as non-tax revenue (PNBP) are paid directly to the state treasury through the Perception Bank, while regional income is paid through a bank appointed by the regional government.
Report
Employers of foreign workers are required to report every 1 year at least 1 time to the MoM through the Director General of Manpower Placement Development and Employment Opportunity Expansion (Ditjen Binapenta & PKK) for the implementation of the employment of foreign workers, the implementation of education and job training for foreign workers accompanying workers, and the implementation of technology transfer and transfer of expertise from foreign workers to workers. Employers of foreign workers for temporary work are required to report the implementation of the employment of foreign workers after the expiration of the work agreement to the MoM through the Ditjen Binapenta & PKK. Employers of foreign workers are required to report to the MoM through the Ditjen Binapenta & PKK for TKA work agreements that have expired or are terminated before the work agreement period ends. The report of the Employer of Foreign Workers and the report on the expiration of the use of Foreign Workers are prepared in accordance with the format as stipulated in Format 12 of Permenaker No. 8/2021 attachment.
