Policy Alert

Foreign worker regulation revised

By AmCham Staff
Tuesday, July 24, 2018

In a welcome development for companies needing to employ foreign nationals in Indonesia, AmCham has received Ministry of Manpower Regulation No. 10 of 2018 regarding the Procedure on the Use of Foreign Workers (Bahasa Indonesia version attached).

This Ministerial Regulation implements Government Regulation (PP) No. 20 of 2018 regarding the Use of Foreign Workers. Effective July 11, this regulation revokes the previous Ministry of Manpower Regulation No. 16 of 2015 regarding the Procedure on the Use of Foreign Workers and subsequent changes.

It is our understanding that the government has pushed for this new system in response to complaints that the previous system was cumbersome and difficult for both local and foreign investors. AmCham has advocated changes to the work permit system for some time and it is hoped that this new regulation will prove to be easier and more streamlined.

The regulation addresses some technical issues including the requirement to facilitate Bahasa Indonesia training for foreign workers. Article 31 of the Ministerial Regulation states that companies that employ foreign workers are only required to facilitate Bahasa training for foreign workers, an apparent easing of previous proposals. In addition, the regulation excludes temporary foreign workers, foreign workers with emergency jobs, members of boards of directors and boards of commissioners from the requirement.

The entire process is to be online – the website to handle the process will be up shortly – and the previous work permit (IMTA) and stay permit (KITAS) are combined into a new temporary stay permit called a VITAS. The company Use of Foreign Workers Planning (RPTKA) permit (Article 11) and notification application (Article 18), will now be online under the new integrated system. Data will be shared with all relevant ministries and the application only has to be submitted once.

A wide array of administrative sanctions are listed for different types of noncompliance (Chapter VIII). The sanction for noncompliance (Article 39) in facilitating Bahasa training is a possible temporary stop to the foreign worker permit process.

Usage of the AmCham Indonesia website states your compliance of our Terms of Use