New Procedure For Foreign Workers Employment In Indonesia

 In Legal Updates, Uncategorized

As a response to President Jokowi request to simplify foreign workers employment procedure and to remove obligation to be able to speak Indonesian language, the Minister of Manpower issued Regulation No. 16 of 2015 on Procedure to Employ Foreign Workers (“Ministerial Regulation No. 16/2015”) which has been effective since 29 June 2015. Consequently, the Ministerial Regulation No. 16/2015 does not obligate foreign workers to speak Indonesian language and also eliminates requirement to acquire TA.01 Visa Wire Approval Recommendation, both of which werepreviously required by Minister of Manpower Regulation No. 12 of 2013 (“Ministerial Regulation No. 12/2013”).

To employ foreign workers, an employer is required to acquire Foreign Worker Employment Plan (RPTKA) and Foreign Worker Employment Permit (IMTA). The Ministerial Regulation No. 16/2015 recognizes several types of RPTKA and IMTA, namely RPTKA and IMTA for general works, RPTKA and IMTA for urgent and emergency works, RPTKA and IMTA for temporary works, and few other types of RPTKA and IMTA.

RPTKA for General Works

RPTKA is required to acquire IMTA. This RPTKA is issued by Director General of Worker Placement and Job Opportunity Expansion (Director General) for an employer who employs 50 foreign workers or more, or Director or Foreign Employment Control (Director) for an employer who employs less than 50 foreign workers[i]. To acquire RPTKA for general works, an employer must submit an online application to the Director General through the Director by uploading[ii]:

  1. Reasons to employ
  2. Completed RPTKAapplication
  3. Business licenses
  4. Deed and decision of incorporation ratification and/or its amendments
  5. Organization chart of the company
  6. Recommendation on position to be occupied by foreign worker from technical agency
  7. Statement of domicile of the company issued by the local government
  8. Taxpayer Identification Numbers of the employer
  9. Letter of appointment of an Indonesian worker mentee and mentoring program plan
  10. Statement to implement occupational learning and training for Indonesian workers within the job qualification occupied by the foreign workers, and
  11. Valid manpower report in accordance with Law No. 7 of 1981

Upon completion of RPTKA application, the Director General or the Director must issue decision on validation of RPTKA within 3 business days[iii]. This RPTKA may be granted for a term not to exceed 5 years and can be renewed by considering condition of domestic employment market[iv].

IMTA for General Works

When RPTKA has been acquired, an employer can submit an online application for IMTA for general works to the Director by uploading[v]:

  1. Receipt of payment for foreign employment compensation through a government designated bank
  2. Decision on validation of RPTKA
  3. Passport of foreign workers to be employed
  4. 4×6 cm passport color photograph of the foreign workers
  5. Letter of appointment of Indonesian mentee
  6. Having a suitable education for the position to be occupied by the foreign workers
  7. Having a competency certificate or at least 5 years suitable work experience
  8. Draft of employment agreement or agreement to do work
  9. Insurance policy with an insurance company which is an Indonesia legal entity, and
  10. If necessary, recommendation for foreign workers from authorized institution

Unlike the previous Ministerial Regulation No. 12/2013, the Ministerial Regulation No. 16/2015 stipulates that IMTA must also be acquired by member of Board of Directors, member of Board of Commissioners, member of Trustees, member of Management, and member of Supervisors who are domiciled abroad[vi]. These foreign workers are not required to fulfill IMTA application requirements as mentioned in point e, f, g, and h, but they are required to upload deed and decision of establishment validation or its amendments along with their IMTA application[vii].

Once IMTA application and its requirements have been completed, the Director will issue IMTA within 3 business days. IMTA validity shall not exceed 1 year but can be extended in accordance with Ministerial Decree on Positions Open to Foreign Workers or RPTKA[viii].

Notable Changes and New Requirements

The Ministerial Regulation No. 16/2015 introduces few new requirements for foreign workers to be able to work in Indonesia,[ix] which are as follows:

  1. Tax Identification Numbers for employment of more than 6 months
  2. Insurance policy with an insurance company which is an Indonesia legal entity
  3. Participation of the National Social Security for employment of more than 6 months

The above mentioned requirements do not apply to emergency and urgent works. In addition, the requirements to own Tax Identification Numbers and participate in National Social Security also do not apply to foreign workers who are employed for temporary works and impresario services[x].

The Ministerial Regulation No. 16/2015 stipulates more temporary works. Consequently, temporary RPTKA and temporary IMTA must now be acquired by employers of foreign worker to conduct the following temporary works[xi]:

  1. Give a lecture
  2. Attend a meeting which is held by headquarter or representative office in Indonesia
  3. Conduct audit, quality control of production, or inspection in company branch in Indonesia

Lastly, the Ministerial Regulation No. 16/2015 also introduces a requirement for employers to at least absorb 10 Indonesian workers to employ 1 foreign worker. But this requirement does not apply to member of Board of Directors, members of Board of Commissioners or members of Trustees, members of Managements, and members of Supervisors. This requirement also does not apply to emergency and urgent works, temporary works, or impresario services[xii].

For further information on the new procedure to employ foreign workers, please kindly contact us at

E: bpl@smartlegal.id  and H: +62821-1234-1235

 

[i]Article 5 and Article 10 of Ministerial Regulation No. 16/2015

[ii]Article 6 of Ministerial Regulation No. 16/2015

[iii]Article 7 and Article 8 of Ministerial Regulation No. 16/2015

[iv]Article 12 of Ministerial Regulation No. 16/2015

[v] Article 38 of Ministerial Regulation No. 16/2015

[vi] Article 37 of Ministerial Regulation No. 16/2015

[vii] Article 38 paragraph (2) and Article 38 paragraph (6) of Ministerial Regulation No. 16/2015

[viii] Article 39 paragraph (1) and Article 39 paragraph (2) of Ministerial Regulation No. 16/2015

[ix] Article 36 paragraph (1) and Article 36 paragraph (3) of Ministerial Regulation No. 16/2015

[x] Article 36 paragraph (4) of Ministerial Regulation No. 16/2015

[xi] Article 16 and Article 46 of Ministerial Regulation No. 16/2015

[xii] Article 3 of Ministerial Regulation No. 16/2015

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