“Foreign Workers in Indonesia must have a Permit”
In principle, every employer who employs foreign workers in Indonesia must have written permission and a valid foreign worker utilization plan from the Minister of Manpower and/or designated officials. However, this requirement does not apply to foreign representatives who employ foreign workers as diplomatic and consular staff.
I. Scope of Employers and Requirements for Employing Foreign Workers
Every employer who employs foreign workers in Indonesia must have written permission and a valid foreign worker utilization plan from the Minister of Manpower and/or designated officials. However, this requirement does not apply to foreign representatives who employ foreign workers as diplomatic and consular staff. Employers who are individuals are prohibited from employing foreign workers. The scope of employers of foreign workers as regulated in Presidential Regulation 20/2018 includes:
- Government agencies, foreign country representatives, international bodies, and international organizations;
- Foreign trade representative offices, foreign company representative offices, and foreign news offices operating in Indonesia;
- Foreign private companies registered with the relevant authorities;
- Legal entities established under Indonesian law in the form of Limited Liability Companies or Foundations;
- Social, religious, and educational institutions;
- Impresario service businesses; or
- Business entities as long as they are not prohibited by law.
The requirements that must be met by every foreign worker employed by an employer are as follows:
- Having an education corresponding to the qualifications of the position to be occupied by the foreign worker;
- Having a competency certificate or at least 5 (five) years of work experience in line with the qualifications of the position to be held;
- Transferring expertise to the Accompanying Local Worker;
- Having a Taxpayer Identification Number (NPWP) for foreign workers who have been working for more than 6 (six) months; and
- Possessing a valid work permit (ITAS) issued by the competent authority.
II. Position Prohibitions for Foreign Workers
Every employer can employ foreign workers but must prioritize the use of Indonesian workers in all available positions. Every foreign worker employer is prohibited from employing foreign workers in positions that cannot be filled by foreign workers or positions that are closed to foreign workers. Foreign workers are prohibited from holding positions related to personnel and/or specific positions. The specific positions prohibited for foreign workers are as follows:
- Personnel Director
- Industrial Relations Manager
- Human Resource Manager
- Personnel Development Supervisor
- Personnel Recruitment Supervisor
- Personnel Placement Supervisor
- Employee Career Development Supervisor
- Personnel Declare Administrator
- Chief Executive Officer
- Personnel and Career Development Specialist
- Personnel Specialist
- Career Advisor
- Job Advisor
- Job Advisor and Counseling
- Personnel Training Administrator
- Job Analyst
- Occupational Safety Specialist
Every employer of foreign workers who employs foreign workers must meet the following requirements:
- Possess a Foreign Worker Utilization Plan (“RPTKA”) authorized by the Minister of Manpower or designated official;
- Pay the Foreign Worker Utilization Compensation Fund (“DKP-TKA”) for each foreign worker employed in accordance with the provisions of the legislation;
- Enroll foreign workers in an insurance program at an Indonesian legal insurance company for those working less than 6 (six) months;
- Enroll foreign workers in the National Social Security program for those working for at least 6 (six) months;
- Appoint Accompanying Local Workers for the transfer of technology and skills;
- Implement Education and Training for the Accompanying Local Workers; and
- Facilitate Education and Training in the Indonesian Language for foreign workers employed.
III. Foreign Worker Utilization Plan (RPTKA) Authorization
To obtain RPTKA authorization, the foreign worker employer must submit an online application addressed to the Minister of Manpower or other designated officials. The RPTKA application submitted by the employer must include and attach the following documents:
- Employer Identification – Letter of Application
- Reason for employing foreign workers – Business Identification Number (NIB) and/or Employer Business License
- Position or role of the foreign worker within the company’s organizational structure – Deed and Official Ratification of Establishment and/or changes from the relevant authority
- Number of foreign workers – Employment report proof at the company
- Duration of foreign worker employment – Draft employment contract or other agreement
- Work location of the foreign worker – Company organizational structure chart
- Identity of the Accompanying Local Worker – Statement letter for the appointment of the Accompanying Local Worker
- Annual plan for the absorption of Indonesian workers – Statement letter to implement education and training for Indonesian workers according to the qualifications of the position held by the foreign worker, and statement letter to facilitate Indonesian Language education and training for the foreign workers.
Concerning the obligations and prohibitions for employers of foreign workers, application procedures, extensions, and changes to the RPTKA, foreign worker residence permits, reporting, guidance, supervision, and the imposition of administrative sanctions are regulated in Government Regulation 34/2021. Essentially, every employer employing foreign workers must repatriate the foreign worker to their home country once the employment relationship ends.
For more detailed information, please do not hesitate to contact us at:
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Disclaimer:
The information contained in this newsletter is not intended as legal advice, legal opinion, or legal suggestion suitable for your business. Readers acknowledge that each company operates differently, and the information provided may not be applicable to all business activities. It is strongly recommended that readers consult with a professional or contact us directly before taking any legal action based on the information provided in this newsletter. By reading this newsletter, the reader agrees to discharge any claim, compensation, lawsuit, fine, or any penalty that might occur according to any information provided herein.