Procedures of Employing Foreign Workers Under MOM Reg. 8/2021

On March 31, 2021, the Minister of Manpower issued Regulation No. 8 of 2021 on the Implementing Regulation of Government Regulation 34 of 2021 on the Employment of Foreign Workers (“MOM Reg. 8/2021”). As its name implies, MOM Reg. 8/2021 is an implementing regulation of Government Regulation 34 of 2021 on the Employment of Foreign Workers dated February 2, 2021 (“GR 34/2021”) which specifies in greater detail the mechanism and requirements that must be fulfilled to employ foreign workers. Please see our Newsflash on GR 34/2021 here.

Previously, the employment of foreign workers was regulated under Minister of Manpower Regulation No. 10 of 2018 dated July 11, 2018 on the Procedures on the Employment Workers (the “Previous Regulation”). MOM Reg. 8/2021 revokes and replaces the Previous Regulation.

The highlights of MOM Reg. 8/2021 are as follows.

  • Procedures on the Application and Issuance of Legalized Manpower Utilization Plans

In order to employ foreign workers, employers must first submit and obtain a legalized Manpower Utilization Plan (an “RPTKA”). An RPTKA also serves as the basis to grant visas and stay permits for foreign workers.  The steps to apply for an RPTKA are as follows:

  1. Creation of an account by the employer in the Online Foreign Worker Employment System;
  2. Filling out application data and uploading required documents to obtain a legalized RPTKA;
  3. Evaluation of the application for the legalized RPTKA;
  4. Filling out the data on the potential foreign worker(s) and uploading required documents for such foreign workers;
  5. Issuance of a Notification of Foreign Worker Employment Compensation Fee (“DKPTKA”); and
  6. Issuance of a Legalized RPKTA.

For an application for a Legalized RPTKA, an employer shall submit at least:

  1. The name, address and business activity of the employer;
  2. The name, sex, age and address of the foreign worker;
  3. The position or type of job of the foreign worker;
  4. The place of work;
  5. The amount of compensation and payment terms;
  6. The employment terms, including the rights and obligations of the Foreign Worker and the Employer;
  7. The validity period of the employment contract;
  8. The place and date the employment contract is made;
  9. The signatures of the parties in the employment contract.
  • Procedures on the Application and Issuance of Legalized Manpower Utilization Plans

There are four types of RPTKAs, namely: (i) an RPTKA for Temporary Jobs; (ii) an RPTKA for Jobs Lasting More than 6 Months; (iii) an RPTKA for non-DKPTKA Jobs; and (iv) an RPTKA for Work at Special Economic Regions (Kawasan Ekonomi Khusus or a “KEK”).

RPTKAs for Temporary Jobs

This RPTKA covers the following types of jobs:

  • Commercial filmmaking that is approved by relevant authorities;
  • Audit, production quality control or inspections on Indonesian branches for a duration of more than 1 (one) month;
  • Jobs related to installation of machinery, electricity, after sale service or products in the exploration/development stage of the business;
  • Impresario services; or
  • One-off jobs or jobs that have a duration of less than 6 months.

The Legalized RPTKA for these jobs are valid for a maximum of 6 months and may not be extended.

RPTKAs for Jobs Lasting More Than 6 Months

This RPTKA covers jobs that last more than 6 months that is to be filled by a foreign worker.  The Legalized RPTKA for these jobs is valid for up to 2 years and may be extended subject to the relevant immigration rules.

RPTKAs for Non-DKPTKA Jobs

RPTKA for Non-DKPTKA Jobs may be further divided into Non-DKPTKA jobs in: (i) social, religious, and educational institutions, or (ii) government institutions or foreign country/international organization representatives. The Legalized RPTKA for these jobs is valid for up to 2 years and may be extended subject to the relevant immigration rules.

RPTKA for Work at KEKs

These RPTKA covers jobs held by foreign workers in KEKs. The Legalized RPTKA for these jobs is valid for up to 5 years and may be extended subject to the relevant immigration rules. For a Director/Commissioner position in a KEK, the validity of the Legalized RPTKA is valid for the duration of the term of the Director/Commissioner subject to the relevant immigration rules. Furthermore, a Legalized RPTKA for work in a KEK is valid for work locations within the same KEK and other KEKs.

Once an application for the legalized RPTKA is submitted, it will be evaluated by the Directorate General of Manpower Placement Development and Work Opportunity Expansion.

  • Exemptions from Having RPTKAs

A legalized RPTKA is not required for: (i) directors/commissioners who have certain share ownership in the company (i.e., the employer); (ii) Diplomatic or consular officers at foreign countries’ representative offices; or (iii) foreign workers employed by employers for production activities that were stopped due to emergencies, vocational, technology-based start-ups, business visits and limited period research.

For foreign workers in technology-based start-ups or vocational business activities, the exemption from having a legalized RPTKA is only valid if the job/business activity lasts for up to 3 (three) months. During this time, the employer for these businesses is only required to submit the data of the potential foreign worker. If the job/business activity exceeds 3 (three) months and the employer intends to employ the foreign worker, then an application for a legalized RPTKA is required.

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June 3, 2021

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

 

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