This Webinar session aims to explain how businesses can achieve high-speed market entry into Indonesia through a Professional Employer Organisation (PEO) or Employer Of Record (EOR).
Free On-Demand Webinar | Indonesia | 2nd July 2020, Morning and Afternoon Session
Entering Indonesia’s Market Quickly and Compliantly with PEO/EOR
In this episode, you will understand how a PEO or EOR can help your business to expand into Indonesia in a more cost-effective and compliant way.
How Does a POE/EOR Work in Indonesia?
It involves a co-employment relationship between the PEO/EOR and your company. In this regard, the PEO/EOR will service your company in areas like HR consulting, payroll processing, employee benefits administration and labour law compliance management. On the other hand, your company retains control over its core business and maintains management rights.
AYP Group’s Scope of PEO/EOR Services
The following are key HR functions we can manage on behalf of your business:
- Drafting and maintenance of employment contracts
- Providing insurance coverage for your employees and their dependents
- On-boarding
- Processing of payroll, salary and statutory contributions
- Aligning your business in compliance to Indonesia’s labour laws
- Supporting your business in day to day HR operations
Understanding Indonesia’s Contract Types, Labour Laws and Employee Benefits
For detailed explanations and elaborations on the mentioned terms, you may refer to the Webinar recording that has been uploaded on YouTube:
https://youtu.be/qCEkB6p3Gz0
1. Contract Types
In Indonesia, there are three types of contracts:
- Permanent
- Non-permanent
- Part-time
For permanent contracts, the duration of employment is only valid for two years may be extended for a maximum of one year thereafter. As for part time contracts, employees work for less than 35-40 hours per week and their wages are paid on a daily basis.
2. Labour Laws
The Manpower Law in Indonesia is principally governed by Act No. 13 of 2003. Two other key regulations to note of are: Article 1 Number 2 Decree Of The Minister Of Manpower And Transmigration Of The Republic Of Indonesia and the Regulation Of The President Of The Republic Of Indonesia Number 72 Of 2014.
Work Permits
The IMTA (Izin Mempekerjakan Tenaga Kerja Asing) is a temporary Expatriate Work Permit. Only with the IMTA will foreign workers be issued their limited stay permit (VITAS) and limited stay permit card (KITAS).
An Indonesian employer who wants to hire a foreign employee must get a Foreign Manpower Utilization Plan (RPTKA) from the Manpower Ministry.
The validity of an IMTA depends on the type of industry the employee is working in and the type of RPTKA. Namely, there are three duration of validity:
- Urgent or emergency work permit (1 month)
- Temporary work permit (2 to 6 months)
– Applicable to the following industries: trading, services, consulting, maintenance and installation of machinery. - Long term work permit (7 to 12 months)
– Applicable for expats holding higher management positions like managers, directors, and commissioners.
3. Employee Benefits
The main employee benefits include the following:
- 12 days of annual leave
- Tunjangan Hari Raya or festive allowances
- Social contribution
- Insurance coverage
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