The utilization of foreign workers (Tenaga Kerja Asing or TKA) in Indonesia is governed primarily by Law No. 13 of 2003 on Manpower, as significantly amended by Law No. 6 of 2023 concerning the Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 concerning Job Creation into Law (commonly referred to as the “Job Creation Law” or “Omnibus Law”). The operational framework for TKA utilization is further detailed in Government Regulation (PP) No. 34 of 2021 on the Utilization of Foreign Workers and Minister of Manpower (Permenaker) Regulation No. 8 of 2021.

Statutory Basis and Employer Eligibility

Under Article 42, Paragraph (1) of Law No. 13 of 2003 as amended by Law No. 6 of 2023, the fundamental requirement for employing foreign nationals is stated as follows: “Setiap Pemberi Kerja TKA yang mempekerjakan Tenaga Kerja Asing wajib memiliki rencana penggunaan Tenaga Kerja Asing yang disahkan oleh Pemerintah Pusat” (Every TKA Employer who employs Foreign Workers is required to have a foreign worker utilization plan authorized by the Central Government).

According to Article 3 of PP No. 34/2021, entities permitted to employ foreign workers include:

  1. Government institutions, representatives of foreign countries, and international organizations.
  2. Foreign trade representative offices, foreign news representative offices, and foreign company representative offices.
  3. Foreign private companies operating in Indonesia.
  4. Legal entities (such as Perseroan Terbatas or PT) established under Indonesian law or foreign entities registered with the competent authority.
  5. Social, religious, educational, and cultural institutions.
  6. Personnel recruitment agencies.
  7. Other business entities permitted by law to employ TKA.

Individual employers are strictly prohibited from employing foreign workers under Article 4 of PP No. 34/2021. Furthermore, TKA are prohibited from occupying positions that deal with personnel or human resources (jabatan yang mengurusi personalia), as stipulated in Article 46 of Law No. 13/2003.

The Foreign Worker Utilization Plan (RPTKA)

The RPTKA is the mandatory administrative document that serves as the basis for the issuance of work-related permits and subsequent immigration stay permits. Under the current integrated system, the RPTKA is processed through the “TKA Online” portal managed by the Ministry of Manpower.

Article 12 of Permenaker No. 8/2021 defines the specific components that must be included in an RPTKA application:

  1. The identity of the employer.
  2. The reasons for utilizing TKA.
  3. The specific position or title of the TKA within the organizational structure.
  4. The number of TKA to be employed.
  5. The duration of the TKA’s employment.
  6. The location of work.
  7. Information regarding the Indonesian counterpart worker (Tenaga Kerja Pendamping).
  8. A plan for the education and training of Indonesian workers.

There are four distinct types of RPTKA approvals based on the nature and duration of the work:

  1. RPTKA for Temporary Work (RPTKA Pekerjaan Sementara): Valid for a maximum of six months and cannot be extended. This is typically used for film production, commercial audits, or machinery installation.
  2. RPTKA for Expert Work (RPTKA Pekerjaan Lebih dari 6 Bulan): Valid for a maximum of two years and is extendable.
  3. RPTKA for Non-DKP-TKA (Exempt): Specifically for government agencies, international bodies, or diplomatic missions where the compensation fund is not required.
  4. RPTKA for the Special Economic Zones (SEZ/KEK): Governed by specific ease-of-doing-business provisions within designated zones, allowing for durations of up to five years and extendable.

RPTKA Exemptions

The Job Creation Law introduced significant exemptions to the RPTKA requirement to facilitate investment and urgent technical needs. According to Article 42, Paragraph (3) of Law No. 13/2003 (as amended) and Article 19 of PP No. 34/2021, an RPTKA is not required for:

  1. Members of the Board of Directors or Board of Commissioners who are also shareholders of the company (subject to specific ownership thresholds defined in investment regulations).
  2. Diplomatic and consular officers at foreign representative offices.
  3. TKA required for production activities that have stopped due to an emergency (keadaan darurat).
  4. TKA in technology-based startups (perusahaan rintisan berbasis teknologi), for a maximum duration of three months.
  5. TKA for vocational visits, for a maximum duration of three months.
  6. TKA for business meetings, for a maximum duration of three months.

For the emergency exemption, the employer must file a notification to the Ministry of Manpower no later than two working days after the TKA commences work.

Compensation Fund for the Utilization of TKA (DKP-TKA)

Employers are required to pay a compensation fund, known as the Dana Kompensasi Penggunaan TKA (DKP-TKA), which serves as non-tax state revenue (Penerimaan Negara Bukan Pajak). This fund is intended to finance the training and development of the Indonesian workforce.

The procedural requirements for DKP-TKA under Article 26 of PP No. 34/2021 are:

  1. The fee is set at USD 100 per month per position.
  2. The payment must be made in advance for the total duration of the approved RPTKA.
  3. For RPTKA durations of less than one month, the fee is calculated as a full month (USD 100).
  4. Payments are made through designated perception banks using a billing code issued by the TKA Online system.

Exemptions from the DKP-TKA payment apply to government agencies, international organizations, social institutions, religious institutions, and specific positions in the education sector, as detailed in Article 27 of PP No. 34/2021.

Obligations of the Employer

The utilization of TKA carries specific affirmative obligations for the employer to ensure the transfer of skills and the protection of the domestic labor market. Under Article 7 of PP No. 34/2021, employers must:

  1. Appoint an Indonesian citizen worker as a counterpart (Tenaga Kerja Pendamping) for every TKA employed for the purpose of technology and skill transfer.
  2. Conduct education and job training for the counterpart worker in accordance with the TKA’s qualifications.
  3. Facilitate Indonesian language training for the TKA.
  4. Enroll the TKA in the National Social Security Program (Jaminan Sosial Nasional) for TKA working more than six months, or provide private insurance coverage for those working less than six months.

The requirement to appoint a counterpart worker (point 1) and provide education/training (point 2) does not apply to TKA who occupy positions as members of the Board of Directors or Board of Commissioners.

Reporting and Compliance

Employers are subject to periodic reporting requirements regarding the utilization of foreign workers. Article 32 of Permenaker No. 8/2021 stipulates that employers must submit reports through the TKA Online system every year. These reports must include:

  1. Implementation of TKA utilization.
  2. Implementation of the education and training for Indonesian counterpart workers.
  3. Implementation of the transfer of technology and skills.

Failure to comply with RPTKA requirements, DKP-TKA payments, or reporting obligations may result in administrative sanctions, including the revocation of the RPTKA and the suspension of TKA utilization services for the employer, as outlined in Article 36 of PP No. 34/2021.

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