Refund DPKK / DKPTKA Fund on Early Termination Foreigner

Regulation No. 20 of 2019 Sets Procedure for Refund foreigner Manpower Compensation Fund (DKPTKA / DPKK)

The Minister of Manpower has issued Regulation No. 20 of 2019 on the Administration of Non-Tax State Revenue Originating from the Foreign Manpower Compensation Fund (“Regulation 20/2019”). Regulation 20/2019 regulates the obligation of employers of a foreigner to pay a compensation into the Foreign Manpower Compensation Fund (DKPTKA or also know as DPKK) of USD 100.00 per month. This requirement is not new, as employers have been paying this compensation for many years now for the foreign workers they employ. Important is however that the Regulation 20/2019 confirms that DPKKDKPTKA can be partial returned in case a foreign worker cancels its work permit before the expiration date.

Since the implementation of the new work permit application system in November 2018, refund of DKPTKA was no longer possible. Before that date employers were able to refund their DPKK when foreign workers cancelled their work permit prior to the expiration date.

Refund Procedure DKPTKA / DPKK

When employers hire foreigners, they are required to pay the DPKK / DKPTKA in advance. For example, when an employer hires a foreign worker for 12 months, the amount of USD 1,200 must be deposited in advance. In case a foreigner cancels its work permit before the expiration date, the deposit can be refunded for the months not worked by the foreigner.

A request for refund must be made within one year of the issuance of the relevant notification. A notification acts as an official approval by the Ministry of Manpower for the recruitment of foreign worker.

The procedure for the DPKTKA refund are outlined below:

  • The employer of the foreigner must submit an online application for refund of the DPKTKA
  • Upon acceptance of the refund request, the director of the Utilization and Supervision of Foreign Workers issues a refund recommendation
  • The refund recommendation will be send to the state treasury office who will then issue an approval warrant to refund the remaining DPKTKA to the account of the employer.

The Regulation 20/2019 does not stipulate the timeframe for the refund of the DPKTKA. Previously, it could take up to 12 months before the refund was processed by the manpower authority.

Revocation of Old Regulation

The enactment of Regulation 20/2019 repeals and invalidates the following regulations from the Minister of Manpower:

  • Number PER.282/MEN/1998
  • KEP.365/M/SJ/1999
  • Number KEP.148/MEN/2001