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Working contract for expats with duration >1 year

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  • Working contract for expats with duration >1 year

    Hi all, could you please tell me what the local labour law says about maximum contract duration when hiring a foreigner in Indonesia under the local contract. Can the local contract duration be unlimited? If there's a restriction like "... no longer than 1 year...", how to bypass it and have a contract for 2 or 3 years for example?

  • #2
    Originally posted by Igelchen View Post
    (1) ... what the local labour law says about maximum contract duration when hiring a foreigner in Indonesia under the local contract.

    (2) Can the local contract duration be unlimited?

    (3) If there's a restriction like "... no longer than 1 year...", ...

    (1) I don't remember of any maximum number limit in the Labor Law (you can get a copy of the Law in the internet , in English or Indonesian) .

    (2) No . It must be for a limited time (see related part of the Law below) .

    (3) Same answer as (1) above . Although it is not specified (as far as I remember) in the Labor Law , I interpret it as having a limit of around 3 years in general , except for work positions like director , in which case I guess the contract could be very long or at least renewable every 5 years (this also taking in account the Visa rules) .

    In my view , the idea of the Labor Law is that foreign workers should not take the jobs that Indonesian are capable to take (so only very experienced foreign workers should be allowed) . And a hired foreign worker should transfer his/her knowledge to an Indonesian coworker so after few years this Indonesian could do what the foreigner was doing (this specific foreign , if he/she wanted to still work in Indonesia , he/she should look for a job in a different company) .


    ------------------------------------------


    UU no.13 Tahun 2003 (ACT OF THE REPUBLIC OF INDONESIA NUMBER 13 YEAR 2003)
    CHAPTER VIII
    EMPLOYMENT OF WORKERS OF FOREIGN CITIZENSHIP
    .......
    (4) Workers of foreign citizenship can be employed in Indonesia in employment relations for certain positions and for a certain period of time only.
    .......
    Last edited by marcus; 21-01-21, 14:58.

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    • #3
      What if HR service says that working permit and KITAS must be renewed annually (which is true), this is why the contract must have maximum 1 year duration as the company can't guarantee that the working permit will be extended? Is it a real reason and contract duration is indirectly binded to the annual permits renewal process or it's not true?

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      • #4
        Find copies of labor laws here - https://www.expat.or.id/business/emp...patriates.html
        Danielle Surkatty
        Member of the Organizing Committee
        Living in Indonesia, A Site for Expatriates
        https://www.expat.or.id/

        Living in Indonesia Expat Forum
        Webmaster
        http://www.livinginindonesiaforum.org/

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        • #5
          Originally posted by Igelchen View Post
          What if HR service says that working permit and KITAS must be renewed annually (which is true), this is why the contract must have maximum 1 year duration as the company can't guarantee that the working permit will be extended? Is it a real reason and contract duration is indirectly binded to the annual permits renewal process or it's not true?

          It looks like the HR of this company doesn't know well the new rules , or the HR does not want to make a longer work contract .

          I don't know much about work contract , but couldn't HR make a contract of more than one year and put a clause in the contract that it can be cancelled in case Indonesian Government does not issue/extend the Work Permit ?

          See below a reliable information that suggests the work contract may be longer than 1 year .


          ---------------------------------


          PerMen no.10 Year 2018
          Article 9
          (1) Employers who will employ TKA must have an RPTKA approved by the Minister or an appointed official.
          (2) The term of RPTKA as referred to in paragraph (1) is in accordance with the work agreement or work contract.

          Note : TKA = foreign worker(s)
          RPTKA = company's Plan for Hiring TKA


          ---------------------------------


          From https://www.hukumonline.com/berita/b...perlu-dipahami , Jul 2018

          Here are 10 New Rules (Permen no.10 , year 2018) for the Procedures of Hiring Foreign Workers
          Now, the validity period of the RPTKA is in accordance with the work agreement between the employer and the foreign worker (TKA). TKA in certain sectors can have double positions
          .......
          6) the validity period of the RPTKA is more flexible, according to the work agreement between the TKA and the employer. Previously, the validity period of the RPTKA was only one year and could be extended.
          .......
          Last edited by marcus; 21-01-21, 15:25.

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