• Broader and Stricter Work Authorization Rules and Processes Likely Forthcoming
  • August 17, 2015
  • Law Firm: Fragomen Del Rey Bernsen Loewy LLP - New York Office
  • The Ministry of Manpower (MOM) has changed and clarified work permit-related rules and processes in an effort to protect the local workforce. The new regulation creates a new ratio of local-to-foreign workers, clarifies and adds new requirements for employers obtaining a Foreign Manpower Utilization Plan, creates new short-term work permit categories and requires employers hiring foreign nationals to submit a report on foreign workers, among other changes. Most of the regulations, if implemented, will likely not be effective until after a public comment period, after which the MOM may amend the regulations again.

    Ratio of Foreign to Local Employees

    Employers will have to prove to the MOM that at least ten Indonesian nationals are employed for every foreign employee it seeks to hire. As proof of this ratio, the MOM officers will review the company’s Mandatory Manpower Report, which indicates the number of Indonesian employees. This ratio is likely to be strictly implemented by the MOM.

    The following foreign employees will not be counted in the ratio:
    • Foreign employees appointed as Directors or Commissioners;
    • Foreign employees entering for emergency and urgent work; and
    • Foreign employees entering for temporary work.
    Changes to the Foreign Manpower Utilization Plan Process

    The new regulation requires that employers filing a Foreign Manpower Utilization Plan (RPTKA) - which is the initial application filed online with the MOM to start the work permit process - include a Statement Letter specifying the work training and educational programs to be conducted for the local Indonesian co-laborer. Applications to extend the RPTKA must include a report on the education and training programs that were implemented to facilitate the skills and technology transfer to the co-laborer (with a certificate of training attached, for which more details are likely to be released in the future). The RPTKA can now be granted for up to five years, which was also the previous maximum but was rarely granted in practice.

    New Short-Term Work Permit Categories

    The MOM has created two categories of RPTKA applications for emergency or urgent work, and temporary work, which are exempt from the co-laborer requirement. For RPTKAs for emergency or urgent work, which can be granted for up to one month, the MOM will require a letter explaining the emergency or urgent situation. The RPTKA for temporary work can be granted for either one or six months, depending on the nature of the activities.

    Changes in the Work Permit Process

    Whereas previously the step after the RPTKA is to apply for a work permit recommendation (or TA-01), the MOM has announced that the RPTKA application will be the basis for the work permit (IMTA) while the IMTA will be the basis for the limited stay visa (VITAS) pre-approval. This likely means that the TA-01 step will no longer be required and will be superseded by the IMTA application. For emergency or urgent work, the regulations may allow foreign nationals to start working while the IMTA application is pending, which is currently not the case.

    Additional Activities Requiring Work Authorization

    Additional categories of activities that could previously be done under business visitor status (or on a visa-on-arrival) will now require a work permit (including the RPTKA and IMTA for temporary work). These activities include the following:
    • Mentoring, counseling, and training activities;
    • Commercial film-making;
    • Lecturing/presenting;
    • Attendance at meetings organized by the head office or representative office in Indonesia;
    • Audits, production quality control, or inspections at branch offices of the company in Indonesia;
    • Undergoing a competency assessment in Indonesia;
    • One-time or ad hoc jobs; and
    • Work related to machinery installation, electricity installation, after-sales services, or product services within the period of business development.
    Affected foreign nationals need to obtain an RPTKA and IMTA for temporary work (although it is not yet clear how this will be implemented). The temporary RPTKA/IMTA will usually be granted for a maximum of one month, except for some activities which will be eligible for up to six months’ validity.

    Additionally, foreign Directors or Commissioners, including those entering for a business visit, must hold a work permit as of the date of issuance of the Notary Act (which evidences their position).

    New Reporting Requirement

    Employers hiring foreign workers must submit a report to the Head of Provincial Office or the Head of District/Municipality Office at least seven business days following the start of a foreign worker’s employment. The report should include the progress of implementation of the education and training programs for Indonesian co-laborers (submitted every six months) and any terminated foreign nationals.

    What This Means for Employers and Foreign Nationals

    Due to the likely eventual implementation of the above stricter work authorization requirements, employers should work with their immigration professional to ensure they comply with the new procedures.

    Notably, most of the regulations, if implemented, will not be effective until after a public comment period, after which the MOM may amend the regulations again.