What are the requirements relating to advertising positions?
In principle, before placing an advertisement in an Indonesian newspaper to hire Indonesian workers, the employer is required to notify the MOM local office of the proposed advertisement at least three days before the advertisement’s proposed publication date.
The notification should state the number of employees required and the type of work concerned, along with the requirements with regard to education, skills and experience. However, if a vacancy needs to be filled immediately, the employer can publish an ad with less than three days’ notice before the vacancy is filled or advertised. When the vacancy is filled, the employer must notify the same to the MOM.
What can employers do with regard to background checks and inquiries in relation to the following:
(a) Criminal records?
Employers may require prospective or existing employees to obtain a statement of good behaviour (surat keterangan catatan kepolisian or SKCKS) from the local district office of the Indonesian National Police.
An SKCK is a letter issued by, or on behalf of, the chief of police in the district in which an individual is domiciled confirming that the individual named in the letter is of good behaviour and not presently involved in any criminal investigation or proceedings. This statement is based on the information provided by the head of the village or sub-regency where the individual lives, and a review of the local criminal record. An SKCK does not indicate whether an individual has a criminal record, but rather confirms that the individual is not currently involved in criminal proceedings within that specific district only. Centralised/national criminal records are not available.
(b) Medical history?
An employer can require a potential employee to undergo a physical examination as a condition of employment. It is important that all potential employees be subject to the same conditions. The potential employee should give his or her written consent to both the examination and the release of the results to the employer. The employer can also require that prior medical records be made available to the employer, on a non-discretionary basis and with the potential employee's written consent.
(c) Drug screening?
The test can be carried out, but only in limited circumstances – for instance, where working under the influence of drugs or alcohol could give rise to health and safety considerations (eg, where employees drive or operate machinery) or serious damage to the employer's business. The applicant would need to consent to the test. Drug and alcohol testing should be carried out during employment only if justified, necessary and proportionate, and with the consent of the employee.
(d) Credit checks?
Information of this kind is seldom used in the recruitment process in Indonesia. However, Bank Indonesia produces comprehensive individual credit history reports, which are issued only upon the request of both financial institutions and the individual that the information concerns, as this information is considered confidential.
(e) Immigration status?
A local employer in Indonesia that wants to employ a foreign national must arrange for a work permit for the foreign national. ‘Work permit’ in this context involves an array of registrations and approvals. Foreign nationals may come into Indonesia under business visas to do business-related activities on behalf of their overseas employer, such as participating in meetings, and for investment purposes.
(f) Social media?
There is no prohibition on verifying information provided on public websites, such as news sources, Google searches or social network site searches. The only information that can be collected and retained by employers is information that can be accessed or obtained publicly, not private information.
Employers in Indonesia frequently carry out background checks on applicants. Indonesian employment laws do not expressly regulate background checks. Certain background checks are in practice subject to the consent of the applicant.
Wages and working time
Is there a national minimum wage and, if so, what is it?
The applicable minimum wage varies, depending on the nature and location of the business.
Are there restrictions on working hours?
The Labour Law (13/2003) prescribes ‘normal working hours’ as no more than seven hours per day, 40 hours per week, and six days per week. With the written agreement of the employees (and the union, if the employees are unionised), a five-day, eight hours per day, 40 hours per week basis can be used. Wages of employees working on a five-day week basis must not be less than wages of employees working on a six-day week basis.
Hours and overtime
What are the requirements for meal and rest breaks?
After every continuous period of work of four hours, an employee is entitled to at least 30 minutes' rest time. Reasonable time to perform religious observances must also be given, especially for the Muslim prayer, which is to be carried out five times a day. An employee must be given a weekly rest day after every six consecutive days of work. The normal rest day is Sunday.
How should overtime be calculated?
Overtime is payable from either the seventh hour or the eighth hour, depending on the length of a company's normal workday. Overtime is payable at the rate of 1.5 times the hourly wage for the first hour and double the hourly wage thereafter. The calculation of overtime pay is based on monthly wages. The hourly wage is calculated as 1/173 of the monthly wage.
What exemptions are there from overtime?
Certain categories of employees are not entitled to receive overtime payment provided that they receive higher salaries. These employees are, literally translated, those with responsibilities as the thinkers, planners, executors and controllers of the company’s operations whose working hours could not be limited.
Is there a minimum paid holiday entitlement?
Each employee is entitled to one day of leave with pay for every 23 working days, up to a maximum of 12 days per year. Leave may be taken in parts, but one part must be a period of at least six uninterrupted workdays. These provisions also apply to contract employees.
What are the rules applicable to final pay and deductions from wages?
Beside income tax, two types of mandatory social security contribution are deducted from wages: one to fund the health security system (badan penyelenggara jaminan sosial or BPJS) and one to fund the employment BPJS (including work accidents, old age pension and death cover).
What payroll and payment records must be maintained?
The period for retaining non-financial documents (eg, employee files) is at the discretion of the employer. Tax-related documents in the personnel file must be kept for 10 years.
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