New work permit regulation include mandatory language requirement

17 Jul 18

INDONESIA

IMPACT – MEDIUM

What is the change? The government has released details of the new work permit regulations, including a mandatory language requirement.

What does the change mean? The regulations, released in April, contain several important processing changes to work permits as detailed below. The language provision says that employers must provide Indonesian language training to foreign employees on long-term work permits in non-director positions, and authorities will be making site visits to verify the language ability of these foreign workers.

  • Implementation time frame: An implementation date has not been confirmed, although the regulations were supposed to take effect at the end of June.
  • Visas/permits affected: The regulations affect Expatriate Placement Plans (RPTKA), work permits (IMTA), and Telex Limited Stay Visas (VITAS), Limited Stay Permits (ITAS), and Multiple Exit Re-entry Permits (MERP). The language requirement only affects long-term work permits–short-term and urgent work permit applicants are exempt.
  • Who is affected: Indonesian companies hiring and employing foreign nationals.  
  • Impact on processing times: Work permits will be processed in two business days. Applicants should note that they may face delays due to newly required biometric procedures either at an Indonesian consulate or at the airport upon arrival.
  • Business impact: Although the regulations are meant to streamline some processes and provide greater flexibility, they also impose some new obligations and administrative burdens on companies.
  • Next steps: Employers should review the regulations, prepare for the changes and anticipate delays as labor, immigration and consular officers transition to them.  

Key changes:

  • After issuance of the Expatriate Placement Plan (RPTKA), applicants must apply for a notification (instead of a work permit) with the foreign worker’s details.
  • Applicants must also apply for a Telex Limited Stay Visa (VITAS), ITAS and MERP at the same time as the notification application. Biometrics will either be taken at a consulate if available or at the airport upon arrival in which case the VITAS must be collected at a consulate before travel and the ITAS and MERP will be collected at the airport. Foreign nationals should anticipate delays in implementation of biometrics procedures at consulates, and those who opt to provide biometrics at Indonesian airports may experience long wait times.
  • The Expatriate Placement Plan will be processed within two business days after the preapproval meeting with Manpower authorities, and the notification will be processed within two business days after payment of government billing codes.
  • The validity period of the Expatriate Placement Plan will be based on the duration of the employment contract. Although a maximum duration has not been set, it is likely to be two years under provisions of Indonesian labor law. Currently, RPTKA are valid for one year, renewable.
  • Foreign employees on long-term work permits must demonstrate Indonesian language skills. The employer is responsible for training their employees by working with a language institute or teacher. Officers will visit worksites to check the language abilities of foreign workers. Directors and commissioners are exempt from the language requirement.
  • Work permit applicants in certain industries, such as oil and gas, mining and electricity, will no longer be required to submit recommendation letters from the relevant government body, but the ministry for the relevant sector may request additional documents.
  • A local employment contract will now be mandatory for short-term work permits and for company directors and commissioners.
  • Directors and commissioners holding shares in their Indonesian company are exempt from having to obtain work permits.
  • Emergency RPTKA are limited to natural disasters or other catastrophic situations, and may be requested not more than two days after the foreign employee begins work. Employers should be cautioned that foreign workers may be considered illegally working if they do not possess an approved work permit.

BAL Analysis: The regulations contain significant changes intended to speed up government processing and simplify procedures, but the impact will be clearer once implemented. Authorities attempted to impose mandatory language requirement on foreign workers in 2015, but withdrew them in response to opposition from business groups. BAL will continue to report on the regulations as they are implemented.

This alert has been provided by the BAL Global Practice group and our network provider located in Indonesia. For additional information, please contact your BAL attorney.

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