Want to Hire Foreign Workers? Here Are the Regulations You Need to Know!

Indonesia, as a developing country with a growing economy, attracts many foreign workers (FW) to work in various sectors. However, there are several regulations and requirements that foreign workers must meet to work in Indonesia. These rules are governed by various laws, including the Labor Law.

Regulations Governing Foreign Workers in Indonesia

Foreign workers in Indonesia are regulated by several key laws and regulations, including:

1. Law No. 13 of 2003 on Manpower

• This law provides the legal framework for employing foreign workers in Indonesia and requires employers to prioritize local workers unless specific positions require specialized expertise.

2. Presidential Regulation No. 20 of 2018 on the Use of Foreign Workers

• This regulation streamlines the work permit process for foreign workers while ensuring employers fulfill specific requirements.

3. Minister of Manpower Regulation No. 10 of 2018

• It outlines the procedures for approving the use of foreign workers, including the obligation for employers to prepare a Foreign Worker Utilization Plan (RPTKA).

Requirements for Foreign Workers in Indonesia

Foreign workers intending to work in Indonesia must meet several key requirements, including:

1. Visa and Residence Permit

• Foreign workers must obtain a Limited Stay Visa (VITAS) and Limited Stay Permit (KITAS) to live and work in Indonesia. VITAS is obtained before entering Indonesia, while KITAS is issued upon arrival.

2. Foreign Worker Utilization Plan (RPTKA)

• Employers hiring foreign workers must have an approved RPTKA from the Ministry of Manpower. This document explains the need for foreign workers and the positions they will fill.

3. Permit to Employ Foreign Workers (IMTA)

• IMTA is a mandatory permit that companies must obtain before foreign workers start their jobs. It is issued by the Ministry of Manpower after the RPTKA is approved.

4. Payment of Compensation Fund for Foreign Workers (DKP-TKA)

• Employers hiring foreign workers are required to pay DKP-TKA as compensation. These funds are used to develop the skills of local workers.

5. Proficiency in the Indonesian Language

• While not mandatory for all sectors, certain roles require proficiency in the Indonesian language to facilitate workplace communication.

Exemptions for Foreign Workers

Not all positions or sectors are open to foreign workers. The Indonesian government limits the use of foreign workers to specific jobs that require expertise or specialization unavailable locally. Positions such as managers, consultants, or expert technicians often fall into the permitted categories.

However, foreign workers are prohibited from working in certain sectors, including:

• Human Resources (HR).
• Legal affairs.
• Roles that do not require specialized skills.

Penalties for Violations

Companies or individuals violating foreign worker regulations may face administrative or criminal sanctions. Some possible penalties include:

1. Administrative fines and revocation of work permits.
2. Deportation of foreign workers lacking proper documentation.
3. Criminal charges against employers hiring foreign workers illegally.

Benefits and Challenges of Employing Foreign Workers

Employing foreign workers brings benefits such as knowledge transfer and the improvement of local skills. However, it also presents challenges, such as concerns over employment opportunities for local workers. Therefore, the government continues to balance the need for foreign workers with the protection of local labor.

Therefore, the government continues to balance the need for foreign workers with the protection of local workers. For companies or foreign workers interested in working in Indonesia, understanding these regulations is an essential step to ensure a smooth and lawful work process.

By utilizing the services of RecruitFirst Indonesia, you can receive assistance in ensuring the entire recruitment process is carried out accurately and in compliance with regulations. Contact us for further consultation and find the best solutions for your recruitment needs.