The Use of Foreign Workers by Limited Liability Companies

Government Regulation No. 34 of 2021 concerning the Use of Foreign Workers (GR 34/2021) provides a space for limited liability companies to employ foreign workers in order to meet their human resource needs. GR 34/2021 further stipulates the obligations and prohibitions that a limited liability company must comply with as the employer of foreign workers.

A. Obligations of the Employers of Foreign Workers

Article 2, Article 6, Article 7 and Article 8 of GR 34/2021 regulate the obligations of the employers of foreign workers as follows:

1. Possessing a Foreign Workers Hiring Plan (RPTKA) to be approved by the Ministry of Manpower;
2. Appointing an Indonesian Citizen as Assistant to Foreign Workers for the purpose of technology and expertise transfer; 
3. Paying the Compensation Fund for the Use of Foreign Workers (DPTKA) for each foreign worker employed (not applicable to government agencies, international agencies, social institutions, religious institutions, representatives of foreign countries and certain positions in the field of education)
4. Enrolling foreign workers into a social security program and Indonesian language training.

B. Positions that can be Occupied by Foreign Workers

Employers may only employ foreign workers to occupy certain positions as stipulated in Decree of the Minister of Manpower No. 228 of 2019 concerning Certain Positions That Can Be Occupied by Foreign Workers (MoM Decree 228/2019).

Generally, foreign workers can occupy positions at the level of managers, experts, specialists, and even advisors, according to the needs of the employer.

On the other hand, foreign workers are prohibited from occupying positions that have the authority to deal with human resource matters, such as HR (Human Resource) Department Staff, HR Department Manager, Recruiter, and so on.

Read More: Limited Stay Visa (Vitas) and Limited Stay Permit (ITAS) for Foreign Workers in Indonesia

C. Sanctions for Employers of Foreign Workers

Article 36 and Article 37 of GR 34/2021 further stipulate that if the employer of foreign workers does not carry out its obligations as stated in GR 34/2021, the Minister of Manpower has the authority to impose sanctions on the employer.

The sanction can be in the form of a maximum fine of up to Rp 36,000,000 (thirty six million rupiah) per position, temporary suspension of the RPTKA application process and/or revocation of RPTKA owned by the employer.

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