Global Alerts

INDONESIA – New Stringent Work Authorization Regulations and Processes Anticipated

In an effort to protect the local workforce, the Ministry of Manpower (MOM) has announced upcoming changes to work permit rules. Among several changes, the latest guidelines will establish a new ratio of local-to-foreign workers, create new short-term work permit classifications, revise the requirements for employers receiving a Foreign Manpower Utilization Plan, and require that all employers hiring foreign nationals submit a report on foreign workers. The MOM may still revise the regulations before they go into effect.

Foreign to Local Employee Ratio

Companies must employ at least ten Indonesian nationals for every foreign employee it requests to hire. The Mandatory Manpower Report, which specifies the number of Indonesian employees versus foreign employees, must be submitted by the employer in order for MOM officers to review it. Foreign employees entering as directors or administrators, for emergency and urgent work, and for temporary work, will not be taken into account as part of the ratio.

New Categories for Short-Term Work Permit

Emergency work and temporary work are the two new categories of the RPTKA applications that the MOM has created. For emergency or urgent work, the employer must submit a letter explaining the urgent situation. These work permits can be granted for up to one month. The RPTKA for temporary work, which is dependent on the nature of the activities, can be granted for either one or six months. The regulations for these new categories may allow foreign nationals to begin working while the application is still pending, which is not currently allowed.

Foreign Manpower Utilization Plan Updates

The Foreign Manpower Utilization Plan (RPTKA) is the primary work permit application that employers must file for the MOM to begin evaluating the work permit process. When these new regulations are implemented, employers filing a RPTKA, must include a letter detailing all of the training and education that will be transferred to the local Indonesian workers. Extension applications will also have to provide details of the training and educational programs, possibly including training certificates, that were transferred to the local workers.

Work Permit Process Changes

The current work permit process includes submitting the RPTKA application and then applying for a work permit recommendation (TA-01). Now, the MOM has announced that the RPTKA application will be the basis for the work permit (IMTA) while the work permit will be the basis for the limited stay visa (VITAS). The work permit recommendation step, as part of the work permit process, could potentially be discontinued.

New Reporting Requirement

Employers seeking to hire foreign workers must submit a report to the Head of Provincial Office or the Head of District/Municipality Office at least seven business days following the start of the foreign worker’s employment. The report should include any education and training programs that have been implemented for Indonesian co-laborers, which is to be submitted every six months, and if any foreign nationals have been terminated.

Additional Changes

Some categories of activities that previously fell under the business visitor visa may now require the attainment of a work permit instead. The affected activities include the following:

  • Work related to electricity installation, machinery installation, after-sales services, product services within the business development period;
  • Ad hoc or one-time jobs;
  • Production quality control, audits, or inspections at the company’s branch offices in Indonesia;
  • Attendance at head office meetings in Indonesia;
  • Go through a competency assessment in Indonesia;
  • Lecturing or presenting;
  • Commercial film-making; and
  • Training, counseling, and mentoring activities.

Foreign nationals who these activities affect, will now have to obtain either a RPTKA or IMTA. Furthermore, foreign Directors or Managers, must hold a work permit valid from the date of issuance of the Notary Act, including those who are entering for a business visit.

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