In the era of revolution 4.0 like today, many companies employ Foreign Workers (TKA) to help develop their business. Usually, companies on a national or international scale need foreign workers to fill special positions in certain fields that are not widely owned by Indonesian workers. Some fields that usually require foreign workers are professionals, managers, directors, supervisors, and so on. So, is your company also one of those that employs foreign workers? If so, you must have a good understanding of foreign worker permits. Below we will provide information on licensing foreign workers who work in Indonesia. Check out the article until the end!
Overview of Foreign Workers in Indonesia
According to Labor Law No. 13 of 2003, Foreign Workers or TKA are foreign nationals holding a visa with the intention of working in the territory of Indonesia. Foreign workers may only work in Indonesia for certain positions and certain times and have competence in accordance with the position to be occupied. Foreign workers are prohibited from occupying positions that take care of personnel. The absorption of the number of foreign workers in Indonesia itself has decreased in the last three years. In 2019, Indonesia absorbed 109,546 foreign workers. then at the beginning of the pandemic year or 2020 the number of foreign workers decreased by 14.4 percent and left 93,761, and then shrank again throughout 2021 to 88,271 people. Launching from satudata.kemnaker.go.id, in 2022, the number of foreign workers in Indonesia finally increased to 96.57 thousand, and until October 2022 it continued to increase to 110,833 people. China is the largest contributor of foreign workers in Indonesia, followed by Japan, South Korea, and India.
Who Can Hire Foreign Workers?
Based on Presidential Regulation No. 20/2018 and Minister of Manpower Regulation No. 10/2018, an employer of foreign workers is a legal entity or other entity that employs foreign workers by paying wages or other forms of compensation. Agencies or companies that can employ foreign workers include:
- Government agencies, international bodies, representatives of foreign countries, and international organizations;
- Foreign trade representative offices, foreign news agencies, and representative offices of foreign companies conducting activities in Indonesia;
- Foreign private companies doing business in Indonesia;
- A legal entity established under Indonesian law in the form of a PT, foundation, or foreign business entity registered with the relevant authorities;
- Social, educational, religious and cultural institutions;
- Impresariat business (a business whose activity is to organize entertainment in Indonesia, both bringing in and sending out performers in the field of arts and sports on a temporary basis); and
- Business entities to the extent not prohibited by law.
Requirements for Foreign Workers to Work in Indonesia
Although the government has relaxed regulations on foreign workers, in practice there are still regulations that must be obeyed and tend to be strict. Based on Law No. 13 of 2003, there are several conditions that must be met by foreign workers who want to work in Indonesia, such as:
- Have an education that matches the qualifications of the position;
- Have a certificate of competence or have work experience of at least five years and according to the qualifications of the position to be occupied;
- Transferring their skills to assisted workers;
- Have an NPWP for foreign workers who have worked for more than six months; and
- Have an ITAS or Limited Stay Permit granted to foreign workers to stay in Indonesia for a certain period of time.
What are the positions that can be occupied by foreign workers?
As already mentioned, foreign workers who want to work in Indonesia cannot occupy job positions arbitrarily. Where, the law has stated that companies must prioritize the use of Indonesian labor in all types of positions available. The Minister of Manpower through Decree of the Minister of Manpower No. 228 of 2019 concerning Certain Positions that Can Be Occupied by Foreign Workers includes the category of processing industry and the category of wholesale and retail trade, repair and maintenance of cars and motorcycles. For the processing industry (principal class of chemical industry), certain positions are allowed to be occupied by TKA, among others:
- Business Unit Manager,
- Chemical Formulation Engineering Expert, and
- Market Research Advisor
Meanwhile, for the main class of the beverage industry, the positions that can be occupied by foreign workers include:
- Quality Control Manager,
- Marketing Advisor, and
- Production Advisor
For the category of wholesale and retail trade, repair and maintenance of cars and motorcycles, the positions that can be occupied by foreign workers include:
- Marketing Manager,
- General Manager,
- Machine Maintenance Advisor
So, it can be concluded that as long as foreign workers meet the requirements and work in the above-mentioned positions, they are eligible to work in Indonesia.
Then, what about companies that want to hire foreign workers?
Your company wants to hire foreign workers? There are several requirements that must be met as an employer. What are they?
- Have a Plan for the Use of Foreign Workers (RPTKA) authorized by the Minister or a designated official;
- Pay the Compensation Fund for the Use of Foreign Workers (DKP-TKA) for each foreign worker employed;
- Include foreign workers who have worked for less than six months in an insurance program at a legal insurance company;
- Include foreign workers who have worked for less than six months in the National Social Security program;
- Appoint Companion Workers in order to transfer technology and expertise of foreign workers;
- Carry out training and education for Labor Assistance; and
- Facilitate Indonesian language education and training for foreign workers.
If you can’t fulfill the above requirements, you are not allowed to hire foreign workers. Meanwhile, the status of foreign workers becomes illegal, aka breaking the law.
What Should a Company Prepare to Hire Foreign Workers?
When you want to hire foreign workers, make sure you have an RPTKA. RPTKA is a plan for the use of foreign workers in certain positions made for a certain period of time and authorized by the Minister or a designated official. To get it, you can apply to the Director General of Foreign Workers online through tka-online. Kemnaker.go.id. In addition, you must also submit a clear work agreement that covers employment at a certain time and for a certain position. Considering that based on government regulations, foreign workers are prohibited from staying in Indonesia forever, unless they change their citizenship. So, make sure you have prepared the employment agreement appropriately according to the existing regulations and the needs of the company! Then, after the agreement has been made and the RPTKA has been received, you will be asked to submit almost the same data when applying for the RPTKA to get a notification of approval for the use of foreign workers issued by the Director General of Labor Placement and Expansion of Employment Opportunities as the basis for issuing ITAS for foreign workers. It should also be noted that companies can use the services of foreign workers who have been under contract with other companies before. However, the work given is limited to certain sectors and must still obtain permission from the previous company.
Procedures for Processing Licenses for the Use of Foreign Workers
As explained, when you want to hire foreign workers, you must have an RPTKA as one of the foreign worker licensing documents. To take care of it, you can submit it online to the Director General of Manpower Placement and Expansion of Employment Opportunities in two ways, namely:
Performing Data Entry
- Identity of the foreign worker’s employer;
- Number of Indonesian workers employed;
- Indonesia’s labor absorption plan every year;
- Plan for the use of foreign workers every year according to the employment agreement;
- Companion Worker Data; and
- Reasons for using foreign workers.
Uploading Multiple Documents
- Draft work agreement or employment agreement;
- Organizational structure chart;
- A statement letter for the appointment of Labor Assistance;
- A statement letter to carry out education and training for Indonesian workers in accordance with the classification of positions occupied by foreign workers; and
- A statement letter of emergency conditions from the employer in the case of hiring TKA for emergency and urgent work.
This RPTKA application can be made no later than two days after the TKA is employed. The RPTKA issuance process can be done within one day, with a maximum validity period of one month and cannot be extended.
Sanctions Imposed in the Event of Violation
According to Permenaker No. 10/2018, there are four types of sanctions that can be imposed when companies violate the regulation. The sanctions referred to are as follows:
- Postponement of services, if the employer does not include foreign workers in insurance programs, national social security, does not report the use of foreign workers and training education for accompanying workers.
- Temporary Suspension of TKA Licensing Process, if it does not have RPTKA, does not appoint Companion Workers, does not carry out training and education, and does not facilitate training and education for companion workers.
- Revocation of Notification, if employing foreign workers in positions prohibited by foreign workers and not paying DKP-TKA.
- Other sanctions depend on the severity of the offense committed.
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Those are some things related to foreign worker permits and requirements in Indonesia. So, for those of you company owners who need the help of foreign workers to develop your business, it’s good to know everything related to foreign workers.
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Do not let your business only develop briefly and then get into trouble just because of hiring foreign workers who are not in accordance with applicable regulations. Well, for KH Pals who are still confused about TKA, you can do a free consultation with Kontrak Hukum, a digital legal platform that can help you find solutions to all business needs. In addition to consultation, we can also help you to create and prepare all licenses and agreements needed to manage TKA in Indonesia. For information on services that suit your needs, visit the KH Services – Immigration page. If you have any other questions or needs, feel free to contact us at Ask KH or via direct message (DM) to Instagram @kontrakhukum.
