Employer Sponsorship and Work Permits in Indonesia

Indonesia’s Immigration Law and Labor Law require foreigners to be employed by an Indonesian employer to legally work in Indonesia. It is the employer, and not the employee, who is required to obtain a work permit to allow its foreign worker to legally work in Indonesia. The employer must apply for the work and immigration permit through the TKA online system, which is managed by the Ministry of Manpower (MoM). Applications for visas that are not for work purposes can be submitted through the Directorate General of Immigration’s online visa system.

Work Permits

Any employer who employs foreign workers in Indonesia must obtain a proper work permit issued by the central government (i.e., the MoM). Previously, employers were required to obtain a work permit in the form of a foreign worker utilization plan (RPTKA) and notification approved and issued by the MOM prior to employing foreign workers.

Now, following the issuance of Government Regulation (GR) No. 34 of 2021 dated 2 February 2021 regarding the Utilization of Foreign Workers (GR 34/2021), a notification is no longer required. It has been replaced by a procedure called the RPTKA appropriateness assessment. During the RPTKA assessment, the MoM will determine within two business days upon receipt of complete application documents whether the submitted information and documents are sufficient.

Once the MoM issues the RPTKA assessment result, applicants are required to submit personal information and documents of the foreign workers. Pursuant to GR 34/2021 and MoM Regulation 8/2021, the personal information and documents will be verified by the MoM within no more than two business days.

Upon the verification and the payment of the foreign worker utilization compensation fund (DKP-TKA) by the employer of the foreign worker for each month that the foreign worker is expected to work in Indonesia in an amount of US$100 per month (paid in advance), the MoM will issue the RPTKA approval. Government institutions, international bodies and foreign state representatives are exempted from the requirement to undergo the RPTKA assessment.

After the issuance of the RPTKA approval, the TKA online system will send the relevant data to the Directorate General of Immigration for further processing of the VITAS for working purposes, which will grant entry of the foreign workers to Indonesia.

Based on MoM Regulation 8/2021, there are certain job positions that are exempted from the obligation to obtain ratification of work permit. These positions are:

• members of the board of directors or board of commissioners with a certain share ownership in the company or shareholders in accordance with the prevailing laws and regulations;
• diplomatic or consular officials at a foreign state representative office; or
• foreign employees that are required by the employer in connection with a production activity that has ceased as a result of emergency circumstances, vocational activities, a technology start-up, business visits or research for a set period of time.

Labor Market Regulation

Indonesia's local workforce and job opportunities are mainly protected through limitations on positions that can be occupied by foreign workers. In 2019, the MoM issued Decree Nos. 228 and 349, which list those positions that can be occupied by and those that are restricted for foreign workers in Indonesia. By virtue of these decrees, the government prioritizes Indonesian workers to fill positions that can be filled by local workers.

Furthermore, prior to issuing a work permit, the MoM will carefully assess all the information and documents submitted by the Indonesian employer for the prospective foreign employee (e.g., curriculum vitae, certifications and job description) and determine whether the proposed employment is in line with the government's goal to encourage investment growth while also taking into consideration the availability of Indonesian workers.

Employers in Indonesia are required to submit a minimum of one report (e.g., annual report) to the MoM on their employment of foreign workers. The report covers the implementation of foreign workers' employment, the education and training of Indonesian co-workers and knowledge and technology transfer from the foreign workers to their Indonesian co-workers. Employers must also submit a report to the MoM when completing or terminating the employment relationship with their foreign workers. The template of the report is provided in the Attachment of MoM Regulation 8/2021.

Rights and Duties of Sponsored Employees

Regardless of whether they are working, all foreigners in Indonesia have the obligation to provide any information requested by the Directorate General of Immigration relating to their identity and they must also report any change of civil status, citizenship, job, guarantor or change of address to the local immigration office.

All foreigners in Indonesia must also hand over their passport or stay permit if requested by a Directorate General of Immigration official for immigration supervision purposes. Failure to comply with these requirements may result in the imposition of criminal sanctions. The Immigration Law sets forth other provisions that must be followed by foreigners in Indonesia to avoid criminal sanctions.

From an employment perspective, the regulations on the employment of foreign workers focus more on the obligations of the employers or sponsoring entities that employ foreigners in Indonesia. Some of the rights of the foreign employees can be inferred based on the employers' obligations stated in the regulations.

Excerpted from Lexology In-Depth: Corporate Immigration 2024, published by Law Business Research.

Find the Indonesia chapter of Lexology In-Depth: Corporate Immigration 2024 here.

Further reading:

Stricter Measures Ahead: Analyzing New Amendment to Indonesia’s Immigration Law

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