Indonesia Employment Regulations in 2020

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There have been many important changes to Indonesia Employment Regulations in 2020. Law Number 13 of 2003 elaborates on the labor law of Indonesia, describing conditions for three types of workers, including fixed-term employees, permanent employees, and foreign employees. In Indonesia, employees are distinguished by their length of employment, the nature of their job, and the type of job.

Conditions that Employers Have to Observe
While contracts can be written or oral for permanent employees, contracts must be in writing for fixed-term and foreign employees. Employees must observe the minimum terms of a contract, as stated by the employment law of Indonesia. The terms include:

  • Name, address, and type of business
  • Name, sex, age, and residential address of the employee
  • Occupation or job description
  • Location of where the job is done
  • Total wages and the source of wages to be paid
  • Demands of the job along with the rights of both the entrepreneur and the employee
  • Start date of work and when the contract is valid till
  • Place and date of where the contract is signed
  • Signatures of all parties involved in the agreement.

Trade Unions
Law Number 21 of 2001 states that labor unions will not be officially recognized unless they are registered with the local office of the Ministry of Manpower and Transmigration. A labor union must submit a written registration contract to the local office of the ministry and notify the employer that the ministry has been sent an application. Employers do not have the right to object to this.

The rights of trade unions include:

  • Negotiation of a collective labor agreement with the management
  • Right to represent employees in industrial disputes
  • Right to establish an institution or improve the welfare of fellow employees

The 1945 Indonesian Constitution, Law Number 21 of 1999, and the Labor Law protect employees from discrimination. This includes: Discriminating against employees applying for a job or procuring a standard of living, based on gender, ethnicity, race, religion, skin color, or political preference. Disabled employees must not be treated any differently. Those who are allegedly infected with HIV/AIDS should not face any harsh treatment or bias.
There must also be no discrimination during the training and skill development of employees. Government Regulation Number 8 of 1981 does not allow discrimination between the salaries of male and female employees with the same job.

Maternity Leave
The Labor Law states that an employee is eligible to 1.5 months of maternal leave before giving birth and 1.5 months after giving birth. If an obstetrician recommends further leave from work, an employer must comply. During this time, an employee must receive her full salary and allowance, along with medical reimbursement during her leave. She may also receive additional benefits based on her contract with the employer. The employee maintains the right to breastfeed her baby at any given time, including office hours. To ease the burden, fathers are given a paternal leave of two days, along with the option to avail their annual leave. These holidays can also be availed under exceptional circumstances.

The Indonesian Government has made changes to ensure employees are protected in the workplace and to protect basic rights.

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