Indonesia

Indonesia

Capital: Jakarta
Currency: - IDR
IDR

Indonesia Labor Law and Employment Policy Overview

Employment Law Overview

  • Key Legislation:
    • Labor Law No. 12 of 1948
    • Social Security Law No. 13 of 2003
    • Human Resource Management Law No. 13 of 2004
  • Legal Characteristics:
    • Aims to protect employee rights and promote employment opportunities
    • Stipulates minimum wages, working hours, leave entitlements, and social security benefits

Employment Contract Requirements

  • Contract Types:
    • Fixed-term contracts
    • Indefinite-term contracts
  • Contractual Provisions:
    • Must include job description, compensation, working hours, benefits, and termination terms
  • Language and Currency:
    • Indonesian language and Indonesian Rupiah

Working Hours Regulations

  • Standard Working Hours:
    • 40 hours per week, 7 hours per day (6-day workweek)
    • 40 hours per week, 8 hours per day (5-day workweek)
  • Rest Days and Breaks:
    • At least 1 rest day per week
    • At least 30 minutes break per day

Leave Policy

  • Annual Leave:
    • 12 days, increasing to 1 month after 6 years of continuous service
  • Public Holidays:
    • 21
  • Special Leave:
    • Sick leave: with medical certificate
    • Maternity leave: 3 months prenatal, 1.5 months postnatal
    • Paternity leave: 2 days
    • Family leave: for specific events (e.g., circumcision, baptism, marriage, death)

Employee Severance and Contract Termination

  • Notice Period:
    • 1 month (less than 1 year of employment)
    • 2 months (1 year or more of employment)
  • Severance Pay:
    • Calculated based on years of service, up to 9 months' salary
  • Unfair Dismissal Protection:
    • Employees can file a complaint with the Labor Court

Tax Laws

  • Personal Income Tax:

    • Salary Range (IDR)Tax Rate
      0 - 50,000,0005%
      50,000,000 - 250,000,00015%
      250,000,000 - 500,000,00030%
      500,000,000 and above35%
  • Social Security Contributions:

    • Employee: 10.24%~11.74%
    • Employer: 10.24%~11.74%

Health Insurance

  • Insurance Policy:
    • Employees must participate in the National Health Insurance Program (BPJS Kesehatan)
  • Insurance Coverage:
    • Basic medical services, hospitalization, medication

Compensation and Benefits

  • Minimum Wage:
    • Varies by region
  • Compensation Structure:
    • Basic salary, bonuses, allowances

Work Permits and Visas

  • Permit Requirements:
    • Foreigners require a work permit
  • Application Process:
    • Apply through the Indonesian Immigration Office

Confidentiality and Non-Compete Clauses

  • Enforceability:
    • Confidentiality and non-compete clauses are enforceable in Indonesia
  • Common Provisions:
    • Protection of trade secrets, client lists, and intellectual property

Training and Development

  • Legal Requirements:
    • Safety training, skills enhancement
  • Government Support:
    • Government-funded training programs

Workplace Diversity and Inclusion

  • Legal Requirements:
    • Prohibits discrimination based on race, religion, gender, or disability
  • Enforcement Measures:
    • Government agencies responsible for enforcing the law

Remote Work Policy

  • Legal Framework:
    • No specific legal framework
  • Tax and Insurance Implications:
    • Remote work may impact tax and social security contributions

Authoritative Website Addresses

1.Indonesia Labor Law and Employment Policy Overview
1.1Employment Law Overview
1.2Employment Contract Requirements
1.3Working Hours Regulations
1.4Leave Policy
1.5Employee Severance and Contract Termination
1.6Tax Laws
1.7Health Insurance
1.8Compensation and Benefits
1.9Work Permits and Visas
1.10Confidentiality and Non-Compete Clauses
1.11Training and Development
1.12Workplace Diversity and Inclusion
1.13Remote Work Policy
1.14Authoritative Website Addresses