New procedures for the employment of foreign workers

The Minister of Labor and Transmigration on 28 March 2008 issued Regulation No. PER.02/MEN/III/2008 regarding Procedures for the Employment of Foreign Workers (the “Regulation”). The new Regulation was issued to replace a number of regulations regarding the same subject matter, in light of the development of regional autonomy. The Regulation also serves as the implementation regulations for Article 42(1) and Article 43(4) of Law No. 13 of 2003 regarding Manpower Article 2 of the Regulation stipulates that the Regulation applies to the employment of expatriates in Indonesia by the following employers:i. foreign trade representative offices;ii. foreign private companies;iii. foreign contractors;iv. companies established under Indonesian law;v. institutions involved in social, educational, cultural and religious activities; as well as those involved in entertainment.As a general rule, the Regulation stipulates that all of the above employers must possess a Plan for the Utilization of Foreign Workers (Rencana Penggunaan Tenaga Kerja Asing /”RPTKA”). The RPTKA is the basic document that is required to be attached to the application for the Permit to Employ Foreign Workers (Izin Mempekerjakan Tenaga Kerja Asing / IMTA). The Regulation also requires these employers to register their foreign workers in an employee social security program and / or provide them with life insurance.One important feature of the Regulation is the requirement stipulated by the Regulation that has to be met by the employees in the employment of the expatriates i.e. the expatriate employee must have at least a suitable education and / or five years experience in the field in which they are to be employed; are ready to transfer knowledge and skills they have to an Indonesia colleague, and the expatriate must also be able to communicate in Indonesian.As the Regulation concerns with the mechanics of employing expatriates in Indonesia, the remaining articles of the Regulation contains procedures in RPTKA and IMTA including extension of RPTKA and IMTA and official in charge in issuing them. The Regulation has been in force since the day of its issue on 28 March 2008.