Omnibus Law’s Implementing Regulation on Unemployment Benefits

On February 2, 2021, the Indonesian Government issued Government Regulation No. 37 of 2021 on the Implementation of the Unemployment Benefits Program (in Indonesian, Jaminan Kehilangan Pekerjaan or “JKP”) (such Regulation, “GR 37”). Previously, Law No. 11 of 2020 dated November 2, 2020 on Job Creation (the “Job Creation Law”) amended Article 18 of Law No. 40 of 2004 dated October 19, 2004 on the National Social Security System by including JKP as one of the social security programs in Indonesia. Before the Job Creation Law, JKP was not a social security program.

GR 37 defines JKP as social security provided to workers whose employment is terminated in the form of cash benefits, access to job market information, and job training.

Employers are required to register their workers with the JKP program. The workers shall be: i) Indonesian citizens, ii) below 54 (fifty four) years old when registered, and iii) in employment relationship with the respective employers. In addition, workers who work at large or middle size enterprises must be registered with the following programs: National Health Security (in Indonesian, Jaminan Kesehatan Nasional), Work Accident Security (in Indonesian, Jaminan Keselamatan Kerja or “JKK”), Provident Fund (in Indonesian, Jaminan Hari Tua), National Pension Security (in Indonesian, Jaminan Pensiun) and Life Insurance (in Indonesian, Jaminan Kematian or “JKM”). Workers who work at micro and small enterprises must be registered with the foregoing programs as well, except for the National Pension Security (in Indonesian, Jaminan Pensiun).

  • Application Procedures

For workers who were registered with the social security programs before GR 37 is issued, such workers would be automatically enrolled as JKP program participants. The employers as well as the workers would receive certificates confirming that they are participants in the JKP program.

For workers who are employed after GR 37 is issued, the employers must register such workers by completing the application forms at least 30 (thirty) days after the workers start working for the employers. The Employment Social Security Agency (in Indonesian, Badan Penyelenggara Jaminan Sosial Ketenagakerjaan or “BPJS Ketenagakerjaan”) will provide participant number(s) at least 1 (one) day after the form is received and the first premium is paid to BPJS Ketenagakerjaan. If this process is completed, the employers and the workers will receive certificates confirming that they are participants in the JKP program.

  • Premium and Payment Procedure

The premium for the JKP program shall be paid every month in the amount of 0.46% (zero point four six percent) of a worker’s monthly salary. The 0.46% (zero point four six percent) amount is based on the following calculation:

  1. 22% (zero point two two percent) from the worker’s monthly salary will be paid by the Central Government; and
  2. The remaining 0.24% (zero point two four percent) from the worker’s monthly salary will be paid through the re-composition of the JKK and JKM premia. Pursuant to GR 37, the amount of the JKK premium would be 0.14% (zero point one four percent) from the worker’s monthly salary and the JKM premium would be 0.10 (zero point one zero percent) from the worker’s monthly salary.

The amount of the monthly salary used as the basis for the premium calculation shall not exceed Rp5,000,000 (five million Rupiah). In case the amount is greater than that, then the salary used as the basis for the premium calculation is Rp5,000,000 (five million Rupiah). The monthly salary shall cover the basic salary as well as fixed cash allowances.

  • JKP Benefits

As mentioned in the definition of JKP itself, JKP benefits are in the form of cash benefits, access to job market information, and job training.

JKP benefits will be provided upon employment termination, whether the workers work under a fixed-term employment agreement or a permanent employment agreement, provided that such workers are willing to work again in the future.

JKP benefits may be requested only if the participant has paid at least 12 (twelve) months of premium within a 24 (twenty four) month period and has paid the premium for at least 6 (six) consecutive months before the employment relationship is terminated. In addition, the JKP benefits may be requested 3 (three) times during the participants’ working-age period so long that it fulfils the requirements below:

  1. The first JKP benefits are requested if the participant has paid at least 12 (twelve) months of premium within 24 (twenty four) months and has paid the premium for at least 6 (six) consecutive months before the employment relationship is terminated;
  2. The second JKP benefits are requested if the participant has paid its premium 5 (five) years after receiving his/her first JKP benefits; and
  3. The third JKP benefits are requested if the participant has paid its premium 5 (five) years after receiving his/her second JKP benefits.

JKP benefits may not be requested if the employment relationship is terminated because of the following reasons:

  1. The worker resigns;
  2. The worker suffers from permanent disability;
  3. The worker retires; or
  4. The worker passes away.

Cash benefits

The cash benefits of JKP will be provided no more than 6 (six) months’ salary and paid monthly with conditions as follows:

  1. 45% (forty five percent) from the monthly salary will be provided for the first 3 (three) months; and
  2. 25% (twenty five percent) from the monthly salary will be provided in the following 3 (three) months.

Note that the maximum amount of the monthly salary used in this case is currently set at Rp5,000,000. If the actual amount of the monthly salary of a worker exceeds Rp5,000,000, then the amount used will be Rp5,000,000.

Access to job market information

Access to job market information may be in the form of providing:

  1. data of job vacancies; and/or
  2. job guidance through self-assessment and/or career counseling.

Job training

Job training benefits would be given based on competence and will be carried out online and/or offline. Public or private job training agencies will carry out this job training. These agencies may work together with professional certificate provider agencies to implement competency certification through competency examination.

Further provisions on procedures to provide JKP benefits will be regulated under a Minister Regulation.

  • JKP Benefits’ Claim Limitation and Sanctions

Participants cannot claim JKP benefits if:

  1. participants do not request JKP benefits claim 3 (three) months after his/her employment relationship is terminated;
  2. participants have new occupation; or
  3. participants pass away.

For employers who fail to register its workers to be participants of the JKP program may subject to administrative sanctions, i.e., written warnings and prohibition from certain public services.

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March 15, 2021

Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com) or Thomas P. Wijaya (twijaya@aksetlaw.com) for further information.

 

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