Every employee has the right to earn income that could fulfill their proper life standard. To realize the proper income, the government stipulates the regulation on wages. One of the regulations regarding wages is provincial minimum wages. Therefore, based on the recommendation from the Provincial Remuneration Board of DKI Jakarta Province, provincial minimum wages (“UMP”) has been enacted.
The 2017 UMP for DKI Jakarta Province is stipulated in Governor of DKI Jakarta Regulation No 227 of 2016 (“GR 227/2016”). GR 227/2016 stipulates the UMP for 2017 is of Rp 3.355.750,- per month. The amount of that UMP should take effect commencing 1 January 2017 and apply for every employee. Read the rest of this entry »
Labor Indonesia – Leks Summary of Constitutional Court’s Review on Indonesian Labor Law Compilation of Various Decisions
“Leks Summary of Constitutional Court Review on Indonesia Labor Law Compilation of Various Decisions” the informations about the Decisions of MK over the Labor Law
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Labor Indonesia – The Terms of Occupational Health and Safety Elevator for Transportation of People or Goods
Ministry of Manpower issued a regulation, namely Ministry of Manpower Regulation No. 32 Year 2015 on Amendment to Regulation Ministry of Manpower No. Per.03/Men/1999 on The Terms of Occupational Health and Safety Elevator for Transportation of People or Goods (“Permen 32/2015”), which became effective on 20 October 2015. Permen 32/2015 is an implementing regulation specifically on amendment to previous regulations, namely the Ministry of Manpower Regulation No. Per.03/Men/1999 on The Terms of Occupational Health and Safety Elevator for Transportation of People or Goods.
Manufacture, Installation, Repair, Maintenance and Repair Elevator
Permen 32/2015 is applicable for plan, manufacture, installation, use and maintenance of elevators that are used permanently or temporarily to serve the transport of persons and goods or special items inside a building, except:
- Rack and pinion;
- Screw driven elevator;
- Mine elevator;
- Theatrical elevator;
- Public work, platform elevator;
- Inclined elevator;
- Scissor elevator;
- Other elevators that use is not to serve the transport of people and goods and special items.
Permen 32/2015 revoked the provision in the previous regulation regarding the manufacture and/or installation of elevators that should be in accordance with the plans as approved by the Minister or a designated official. Drawings refer to complete construction drawings with their details; calculation construction; and material specifications and certification. Manufacturing the elevator must comply with the technical requirements stipulated in the Indonesian National Standard (SNI) or a recognized International Standards. Drawings plan of elevator installation should include: Read the rest of this entry »
Pension Guarantee Program is regulated under Government Regulation No. 45 of 2015 on the Arrangements for Pension Guarantee Program (“GR 45/2012”). GR 45/2015 has been enacted since 1 July 2015. Pension Guarantee is defined as social guarantee which is aimed to preserve a decent living for the participants and/or its inheritors by granting an income to them after reaching their retirement age, experiencing total permanent disability, or die (“Pension Guarantee”).
Participation of Pension Guarantee Program
In performing such program, the employers are responsible to register all of their employees to the Social Security Employment Agency/Badan Penyelenggara Jaminan Sosial Ketenagakerjaan (“BPJS Ketenagakerjaan”) as the participant of Pension Guarantee Program.
The parties who are eligible to be the participants of Pension Guarantee Program are:
- employee who is working under state administrator employer; and
- employee who is working under non state administrator employer.
On 30 June 2015, the Government of the Republic of Indonesia promulgated a Government Regulation No. 46 Year 2015 on Implementation of Old-Age Savings Program (“GR 46/2015“). GR No. 46/2015 is a new legislation enacted which is based on the law that has been previously promulgated, namely Law No. 40 of 2004 on National Social Security System (“Law No. 40/2004“). Old-Age Savings is a cash benefit that is paid at once at the time of participants entering retirement age, death, permanent total disability (“OAS”).
Membership OAS Program
Every employer unless the organization of the State (“Employer”) has to registerhimself and his employees into OAS program to Badan Penyelenggara Jaminan Sosial Ketenagakerjaan (“BPJS Ketenagakerjaan”) according to the stages of membership.
The stages of membership are arranged in Regulation of the President No. 109 Year 2013 on Stages of Social Security Program Membership. The stages are grouped based on business scale which consist of (i) big business; (ii) medium business; (iii) small business; and (iv) micro business. Registration of the membership is required from 1 July, 2015. In addition, micro businesses are not required to follow the OAS program.
Membership of OAS program consists of (i) participants received the wages who worked on Employer; and (ii) participants who do not received the wages.
Participants receiving the wages includes:
- employees on company;
- employees on individual; and
- foreigners who work in Indonesia for minimum 6 (six) months.
The provision of provincial minimum wage (“UMP”) is intended to protect the worker’s wage that meets decent livelihood for humans. Previously, UMP was referred as level 1 region minimum wage (“UMR Tk I”). Then, through Minister of Manpower Decree No. Kep-226/Men/2000 on Amendment of Article 1, Article 3, Article 4, Article 8, Article 11, Article 20 and Article 21 of Minister of Manpower Regulation No. Per-01/MEN/1999 on Minimum Wage in Article 1 point 1, UMR Tk I was changed to UMP.
The Provision of UMP
Article 1 point 2 of Minister of Manpower Regulation No. 7 of 2013 on Minimum Wage (“MR No. 7/2013“) describes that the definition of UMP wage is the lowest monthly wage which consists of basic salary including fixed allowance set by the governor as a safety net, applies to all district/city in the province.
As an illustration of UMP, it can be seen in DKI Jakarta Governor Regulation No. 176 of 2014 on Provincial Minimum Wage Year 2015. UMP of 2015 in Special Capital City Region of Jakarta (“DKI Jakarta”) is Rp 2,700,000.- (two million seven hundred thousand rupiah). Therefore, Rp 2,700,000.- includes basic salary and fixed allowance. Read the rest of this entry »
Worker/labor wages might fall to the lowest level as a result of labor market imbalance. Therefore, it is necessary to harmonize the minimum wage policy to ensure the continuity of businesses and improve the living standard of workers/laborers. Minimum wage means the lowest monthly wage that employers may legally pay to workers including principal wage and regular allowances. Minimum wages are set based on the basic cost of living (‘KHL’).
Regulation of the Manpower and Transmigration Minister No PER-01/MEN/1999, as already amended by Decree of the Manpower and Transmigration Minister No.KEP.226/MEN/2000, shall be recalled and declared null and void. Regulation of the Manpower and Transmigration Minister No. 7/2013 ( ‘Regulation No. 7/2013’) shall take effect as from the date of promulgation, which is 18 October 2013.
Under Regulation No. 7/2013 a distinction is made between several types of minimum wages: Read the rest of this entry »
Law Number 7 of 1989 on Mandatory Report on Employment in the Company (“Law No.7/1981”) requires any entrepreneur or management to report in writing any establishment, discontinuance, recommencement, assignment or dissolution of the company to the minister or the competent authority.
Under Article 1 letter (b) of Law No.7/1981 entrepreneur means:
- an individual, a partnership or a legal body that runs a self-owned business;
- an individual, a partnership or a legal body that independently runs a business is not owned by them;
- an individual, a partnership or a legal body that is domiciled in Indonesia but represents a business as set out in number 1 and number 2 above.
The management is defined as the person who is appointed to lead a company.
Article 6 of Law No.7/1981 stipulates that entrepreneur or the management shall report in writing to the appointed minister or competent authority at the latest 30 (thirty) days after establishment, recommencement or transfer of the company. Under Article 2 of Ministry of Employment and Transmigration Regulation Number PER.14/MEN/IV/2006 on the Mechanism of Employment Report in the Company (“MOMT No.14/2006”), entrepreneur is required to prepare an employment report in accordance with the actual condition whether it is in the head office, branch office or the independent part of the company. Read the rest of this entry »
Under Article 56 of Law Number 13 of 2003 on Employment (“Law No.13/2003”), there are two types of employment agreements, namely the employment agreement for definite term employment agreement and indefinite term employment agreement (“PKWTT”).
Article 51 of Law No.13/2003 regulates that employment agreement can be made orally or in writing. If it is made orally, the employer is obliged to issue a letter of appointment for the worker. The mentioned letter of appointment letter shall at least contain information on (i) the name and address of the worker, (ii) the date the worker starts to work, (iii) the type of job that the worker is supposed to do and (iv) the amount of wages that the worker is entitled to.
Under Article 54 paragraph (1) of Law No.13/2003, a written employment agreement shall at least contain: Read the rest of this entry »
Under Article 59 Law Number 13 of 2003 on Employment (“Employment Law”), fixed-term employment contract is an employment agreement for definite period of time, or the completion of work is for certain period (“PKWT”). PKWT is for a temporary job, seasonal job and work related to new activities at the probation stage.
PKWT may be undertaken for a period of maximum 2 (two) years and may only be extended once for 1 (one) year. PKWT may also be renewed for a period of no longer than 2 (two) years. In that case, the renewal of PKWT can only be made after the lapse of 30 (thirty) days grace period.
Under Article 62 of Employment Law, if (a) either party in PKWT terminates the employment relation before PKWT’s expiry date, or (b) if the PKWT ends for reasons other than (i) decease of worker, (ii) PKWT’s expiry, (iii) a court decision or resolution or order of the industrial relation dispute settlement institution which has permanent legal force, such as natural disaster, riot and disturbance to the security, and/or (iv) certain situation prescribed in the PKWT or the company regulation, the terminating party is obligated to give compensation for the remaining contract’s amount to the other party.
Minister of Manpower and Transmigration Decree No. Kep100/Men/VI/2004 on the Implementation of Employment Agreement For Definite Period (“MOMTD No.100/2004”), the PKWT can only be used for the definite term work as follows: Read the rest of this entry »