New work-permit regulations issued

6 Apr 18

INDONESIA

IMPACT – MEDIUM

What is the change? New regulations have been issued that make several changes to work-permit procedures.

What does the change mean? The regulations generally provide more flexibility for companies and foreign workers. These include measures to provide options for urgent assignments, allow certain foreign workers to work for more than one employer, exempt certain foreign workers from the Foreign Worker Placement Plan requirements and extend the duration of some limited stay permits. A new requirement has been added that companies must issue a certificate to Indonesian workers as proof of the transfer of knowledge from a foreign worker to the Indonesian counterpart, although it is unclear whether it only applies for extensions of long-term work Permits.

  • Implementation time frame: June 29.
  • Visas/permits affected: Foreign worker placement plans (RPTKAs); work permits (IMTAs); limited stay visas (VITAS); limited stay permits (ITAS).
  • Who is affected: Indonesian companies sponsoring foreign workers.
  • Impact on processing times: Shorter processing times of two working days apply to foreign worker placement plans, work permits and limited stay visas.
  • Business impact: The regulations appear to provide important new options, but many details need to be confirmed by implementing guidelines to be issued by the Ministry of Manpower and the Ministry of Law and Human Rights.
  • Next steps: Guidelines are expected to be released by the government that should provide more detail on the scope of certain provisions and how they will be implemented.

Key changes:

  • Foreign worker placement plans and work permits will each take no more than two working days to process.
  • Foreign workers may work in the same job title for more than one employer in certain sectors, to be designated by forthcoming regulations.
  • The following categories of foreign workers no longer require a foreign worker replacement plan and may apply for a work permit at the Ministry of Manpower: shareholders who are also working as directors or commissioners in the company, expatriates in jobs considered vital to the Indonesian government (to be determined by the Ministry of Manpower), and diplomatic/consular officers.
  • For urgent assignments not exceeding one month, a company may apply for the foreign worker replacement plan up to two working days after the foreign employee has started work in Indonesia, with issuance within one day of submission. After issuance, the company may apply for the work permit.
  • Certain employers will be exempt from the foreign worker replacement plan and payment of fees to the Skill and Development Fund, including government agencies, international agencies, representatives of foreign governments, social and religious institutions and certain designated educational job titles.
  • Indonesian embassies will be authorized to issue limited stay visas, and must do so within two business days of submission.
  • Some limited stay permits may be applied for at Indonesian embassies, and will be issued upon arrival. It is unclear which limited stay permits this applies to, but it is likely to be limited to urgent assignments not exceeding one month in duration.
  • Limited stay permits may be issued for two years and may be extended. It is unclear whether this applies to all types of these permits.
  • Every employer must register all foreign workers in Indonesia for more than six months with the Manpower Social Security or ensure that the worker is covered by similar private insurance in Indonesia.
  • Employers are required to issue a certificate of training to prove that an Indonesian employee has successfully received transfer of skills from a foreign worker.

BAL Analysis: The regulations provide for important changes that companies should prepare for in the coming months. BAL is following the new regulations and will update clients when implementation details are released by the Ministry of Manpower and immigration authorities.

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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