Terms of Working Period for Foreigners in Indonesia

PERTANYAAN

Are there any provisions or regulations for the working period of foreigners in Indonesia? How long can foreigners work in Indonesia?

INTISARI JAWABAN

By law, Foreign workers can only be employed in Indonesia in an employment relationship for a certain position and a certain time and have competence in accordance with the position to be occupied, through a Temporary Employment Agreement (Perjanjian Kerja untuk Waktu Tertentu/ “PKWT”)

So, how long is the working period for foreign workers? What is the legal basis?

Please take a look at the review below for a further explanation.

ULASAN LENGKAP

This article is an English translation of Ketentuan Masa Kerja WNA di Indonesia, written by Dian Dwi Jayanti, S.H. and was published on Friday, 12 May 2023.

This article is the second updated version of the article with the same title, which was first published on Tuesday, 10 May 2016, and secondly updated by Tri Jata Ayu Pramesti, S.H. on Wednesday, 24 March 2021.

All legal information available on Klinik hukumonline.com has been prepared for educational purposes only and is general in nature (read the complete Disclaimer). In order to obtain legal advice specific to your case, please consult with Justika Partner Consultant.

Definition and Regulations of Foreign Workers

Foreign workers (Tenaga Kerja Asing/ "TKA") are foreign nationals holding a visa with the intention of working in the territory of Indonesia.[1] Foreign workers can be employed in Indonesia only in employment relationships for certain positions and certain times and have competence in accordance with the position to be occupied.[2]

Summarized from Terminated Foreign Workers Entitled to Severance Pay?, foreign workers can only be employed in Indonesia with a Temporary Employment Agreement (Perjanjian Kerja untuk Waktu Tertentu/ “PKWT”), as stipulated in Article 81 number 4 Perppu Job Creation which amends Article 42 section (4) Manpower Law.

PKWT is a work agreement between workers/laborers and employers to establish an employment relationship for a certain period of time or for a certain job.[3] In general, PWKT based on a time period can be made for a maximum of 5 years.[4] If the PKWT period is about to expire and the work carried out has not been completed, it can be extended according to the agreement between the employer and the worker/laborer provided that the total period of PKWT and its extension is not more than 5 years.[5]

Then, does the time period provision in PKWT also apply to foreign workers? To answer this, we need to understand the time period for the recruitment of foreign workers in GR 34/2021.

Time Period for the Recruitment of Foreign Workers

Basically, every employer who employs foreign workers is required to have a Foreign Workers Recruitment Plan (Rencana Penggunaan Tenaga Kerja Asing/"RPTKA"), which is a plan for the recruitment of foreign workers in certain positions and for a certain period of time[6] authorized by the central government.[7] However, this obligation does not apply to:[8]

1. board of directors or commissioners with certain share ownership or shareholders in accordance with provisions of laws and regulations;
2. diplomatic and consulate staffs in foreign country representative offices; or
3. foreign workers that are required by employers in types of production activities that are stopped due to emergency condition, vocation, technology-based start-up, business trips, and research for a specified period.

To obtain an RPTKA, the TKA employer/foreign worker employer must submit an online application for RPTKA authorization to the minister or a designated official,[9] which contains at least:[10]

1. identity of the TKA Employer;
2. reasons for the recruitment of TKA;
3. position or ranking of TKA in the company’s organizational structure;
4. number of TKA;
5. period of time of TKA recruitment;
6. work location of TKA;
7. identity of TKA Understudy Workers; and
8. plan to absorb the Indonesian workforce every year

The period of recruitment of foreign workers is related to the validity period of the authorized RPTKA, which is as follows:[11]

1. Validation of RPTKA for temporary works is granted for a maximum period of 6 months and cannot be extended.
2. Validation of RPTKA for work more than 6 months
3. Validation of RPTKA non-DKPTKA is granted directly for a maximum period of 2 years and may be extended.
4. Validation of RPTKA KEK shall be granted for a maximum period of 5 years and may be extended. Meanwhile, the validation of RPTKA KEK for the position of the board of directors or commissioners shall be given once and is valid as long as the TKA concerned becomes a board of directors or commissioners.

Also read: Criminal Penalty for Foreigners Working Illegally in Indonesia

Furthermore, what is meant by DKPTKA is Compensation Fund for the Recruitment of TKA (Dana Kompensasi Penggunaan TKA), which is the compensation that must be paid by TKA Employers for every TKA who are employed as non-tax state revenue or regional revenue.[12] Moreover, Special Economic Zones, from this point onward referred to as SEZ or in Bahasa Indonesia known as Kawasan Ekonomi Khusus (“KEK”), are areas with certain boundaries within the jurisdiction of the Unitary State of the Republic of Indonesia which are established to carry out economic functions and obtain certain facilities.[13]

Also read: Requirements for Foreign Workers to Work in Indonesia

In conclusion, based on the above provisions, in our opinion, the time period for the recruitment of foreign workers is determined in accordance with the validity period of the RPTKA based on GR 34/2021. Thus, the working period of foreign workers in Indonesia varies depending on the type of work performed, the location of the placement of foreign workers, and/or the position of the foreign worker concerned.

This is our answer, hopefully, you find it useful.

Legal Basis:

1. Law Number 13 of 2003 on Manpower;
2. Regulation of the Government in Lieu of Law Number 2 of 2022 on Job Creation which has been enacted into law under Law Number 6 of 2023;
3. Regulation of the Government Number 34 of 2021 on the Recruitment of Foreign Workers;
4. Regulation of the Government Number 35 of 2021 on Temporary Employment Agreement, Outsourcing, Working Hours and Breaks and Termination of Employment Relationships.

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[1] Article 1 section (13) Law Number 13 of 2003 on Manpower (“Manpower Law”).

[2] Article 81 number 4 Regulation of the Government in Lieu of Law Number 2 of 2022 on Job Creation (“Perppu Job Creation”) which amends Article 42 section (4)  Manpower Law.

[3] Article 1 number 10 Regulation of the Government Number 35 of 2021 on Temporary Employment Agreement, Outsourcing, Working Hours and Breaks and Termination of Employment Relationships (“GR 35/2021”).

[4] Article 8 section (1) GR 35/2021.

[5] Article 8 section (2) GR 35/2021.

[6] Article 1 number 4 Regulation of the Government Number 34 of 2021 on the Recruitment of Foreign Workers (“GR 34/2021”).

[7] Article 81 number 4 Perppu Job Creation which amends Article 42 section (1) Manpower Law.

[8] Article 81 number 4 Perppu Job Creation which amends Article 42 section (3) Manpower Law.

[9] Article 12 section (1) GR 34/2021.

[10] Article 12 section (2) GR 34/2021.

[11] Article 16 jo. Article 17 GR 34/2021.

[12] Article 1 section (7) GR 34/2021.

[13] Article 1 section (6) GR 34/2021.