New Foreign Workers Regulation Issued by Ministry of Manpower
The Ministry of Manpower Issued Regulation Number 10 of 2018 to Regulate Foreign Workers Work Permits
The Ministry of Manpower (MOM) recently issued regulation number 10 of 2018 regarding the Procedures for the Use of Foreign Workers (MOM Regulation 10/2018). MOM Regulation 10/2018 is an implementing regulation of the Presidential Regulation 20/2018 which was issued on March 29, 2018 (please also read our related articles about the Presidential Regulation 20/2018 and the socialization of the new MOM Regulation 10/2018). The Regulation 10/2018 sets out the new procedure for the arrangement of the foreign worker work permit. At the time of writing the MOM Regulation 10/2018 is not yet implemented.
RPTKA and Notification
Under the new MOM Regulation 10/2018, the foreign worker work permit now consists out of an expatriate placement plan (RPTKA) and a Notification. There is no longer a separate work permit (IMTA). Based on the President Regulation 20/2018 the RPTKA now serves as work permit for a foreign worker, however the MOM regulation 10/2018 does not confirm this. Our estimation is that the foreign worker on a short or long term work permit cannot start working until the Notification is issued by the MOM.
Validity of the RPTKA
Currently, the validity of an RPTKA is 1 year, and is renewable for long term work permits. Under the MOM Regulation 10/2018, the validity of the RPTKA can be up to 5 years. However this seems to be in violation of the Manpower Law, which states that a Fixed Term Employment Agreement is valid for a maximum period of 2 years, can be extended for 1 year and can be renewed for maximum 2 years. We will therefore need to wait the actual implementation of the new regulation.
No Work Permit Requirement for Certain Directors and Commissioners
The MOM Regulation 10/2018 does not require Directors and Commissioners who are also holding shares in the same Indonesian Company to obtain an RPTKA and Notification. It seems to implicate that this specific group of directors and commissioners is also not required to pay the monthly USD 100.00 to the Manpower Development Fund (DPKK / DKP-TKA).
Indonesian Language Requirement
Currently, foreign workers are not required to learn the Indonesian language. Under the MOM Regulation 10/2018 this will change. It will become mandatory to facilitate Indonesian language education and training for long term work permit non-Director/Commissioner positions. The language training is not required for Directors, Commissioners and foreign workers using a short term or urgent/emergency work permit. During the socialization, the MOM stated that the foreign workers require a language training certificate from an authorized institution. However the MOM Regulation 10/2018 does not regulate such requirement. This may lead to subjective assessments of the language ability of foreign workers and is likely to open up the system to further abuse and potential requests for facilitation payments.
Double Job Title Exemption for Certain Types of Jobs
Under the current system, foreign directors and commissioners are allowed to hold another director or commissioner position in another Indonesian company. Under MOM Regulation 10/2018, this double job title exemption now also applies to foreign workers who are active the vocational education & training sector, the oil and gas [K3S] sector and the digital economy sector.
Emergency Work Permit
When foreign workers apply for an emergency work permit, they currently cannot enter Indonesia before the issuance of their RPTKA and Work Permit (IMTA). Under the MOM Regulation 10/2018, the foreign workers can immediately enter Indonesia using a Visa on Arrival, and start working. The RPTKA can be submitted at latest 2 days after the foreign workers are working.
We foresee the following potential problems arise when foreign workers start working before issuance of the RPTKA:
- It is a violation of article 42 (1) Manpower Law, which states that every employer which employ foreign workers must have a work permit.
- If the RPTKA is not approved by MOM or the visa is not granted by the Directorate General Immigration, then the foreign workers may be regarded as working in Indonesia illegally