Employers that hire foreign workers (Tenaga Kerja Asing or “TKA”) to work in Indonesia for less than six months must now register the TKA in an insurance program that at least guarantees protection for work accidents. This requirement is governed under Article 8 of Government Regulation No. 34 of 2021 regarding the Employment of Foreign Workers (“GR 34”).
Prior to the issuance of GR 34, insurance for TKA was not regulated under Law No. 13 of 2003 regarding Manpower or the 2020 Job Creation Law, which amended the Manpower Law. Note that GR 34 also regulates that TKA hired to work in Indonesia for more than six months must be registered with Indonesia’s Social Security Organizing Body (Badan Penyelenggara Jaminan Sosial or “BPJS”).
The foreign worker insurance requirement is further regulated by Ministry of Manpower (“MOM”) Decree No. 146 of 2021 regarding Insurance Program for Foreign Workers Working Less Than Six Months and Directorate General of Manpower Placement and Expansion of Employment Opportunities Decree No. 3/144/PK.04/V/2022 regarding the Implementation of Insurance Program for Foreign Workers Working Less Than Six Months (“Decree No. 3”).
Decree No. 3 stipulates, among other things, that the insurance program for these short-term foreign workers shall consist of guarantees for (a) work accidents, (b) health and (c) death. Also, the insurance company managing the program must provide participation data via a system connected and integrated with the TKA Online system at the Directorate of Foreign Workers Utilization Control of the MOM.
Decree No. 3 also requires the implementation of the insurance program to be evaluated every six months or as necessary.
The Appendix of Decree No. 3 regulates the following minimum contributions: (i) IDR 762,000 for a period of one month (30 days); (ii) IDR 1,715,000 for a period of three months (90 days); and (iii) IDR 2,477,000 for a period of six months (180 days). The regulations are silent on whether the employer or the employee is responsible for paying the contributions.
Maximum coverage is IDR 200 million for death and permanent disability caused by a work accident, with an additional maximum of IDR 25 million to return the body of the deceased to the country of origin.
It remains to be seen whether the minimum contributions noted above will be implemented by the insurance companies that offer coverage for short-term workers in Indonesia.
For employers who have not yet applied for a Foreign Workers Employment Plan (“RPTKA”), beginning September 1, 2022, the RPTKA application will require employers to submit an Electronic Policy Certificate from ASTAKA, an online portal established to facilitate insurance programs for foreign workers who work in Indonesia for less than six months.
And for employers with an existing RPTKA, Article 39 of GR 34 stipulates that if such employers fail to register their foreign workers in an insurance program, they will be subject to administrative sanction in the form of temporary suspension of the RPTKA. The regulations are silent on the deadline for employers to register their foreign workers in an insurance program.
For further information, please contact:
Stephen Igor Warokka, Partner, SSEK