Government Regulation No. 34 of 2021 concerning Foreign Workers Utilization

One of the many government regulations issued as the implementing regulation to Law Number 11 of 2020 concerning Job Creation Law. More specifically, with regard to the employment of foreign workers in Indonesia, is now being regulated under Government Regulation No. 34 of 2021 concerning Foreign Workers Utilization (“GR 34/2021”). It was officially announced by the Cabinet Secretariat to the public on 21February 2021 and become effective as of 01 April 2021.

In order to work in Indonesia; As before, foreign workers will require a Foreign Workers Utilization Plan (Rencana Penggunaan Tenaga Kerja Asing/RPTKA) as approved by the Minister of Manpower or by an appointed official. However, one notable change in the GR 34/2021 affecting employers of Foreign Workers (Tenaga Kerja Asing/TKA) regulates that:Other than (1) shareholders whom are acting as member of the
Board of Directors and/or Commissioners, or (2) diplomatic-consular officers, as well as (3) any foreign manpower required for a production process that got halted due to emergency situations, along with (4) vocational programs, technology-based start-up companies, business meetings or time-limited research, it is not mandatory to have RPTKA approved by the Minister of Manpower or appointed official (vide Article 19(1) of GR 34/2021).

In the previous regulation which was recently revoked by GR 34/2021, namely: Presidential Regulation No. 20 of 2018 on the same subject (“PR 20/2018”) stipulated that it is not mandatory for employers of TKA to have the appropriate RPTKA if:
a. He/She is a shareholder acting as an active member of the Board of Directors or is a member of the Board of Commissioners;
b. He/She is a diplomatic and/or consular officer at their representative offices of foreign countries; and
c. The TKA employed is assigned onto the type of eligible work as per required by the government.

In addition, the GR 34/2021 also governs that any employer of TKA shall not obliged to appoint an Indonesian worker to act as an associate for their respective TKA, for TKA whom are (i) A director or commissioner, (ii) The head of a representative office, (iii) The governing board, supervisory board, and executive board of a foundation, or (iv) A TKA whom are employed in a temporary position. Whereas, in the preceeding PR 20/2018, this provision is only applicable for a directors and/or or commissioners.

In attempt to improve the ecosystem for the Special Economic Zones (Kawasan Ekonomi Khusus/KEK), the GR 34/2021 has also laid out details about the RPTKA approval of KEK, provided that the RPTKA granted initially covers a period of no longer than five years, but is then extendable. Furthermore, the RPTKA approval of KEK betowed upon Board of Directors and/or Commissioners will be valid for as long as the person concerned is still positioned as a director and/or a commissioner.

Pursuant to Article 36 of GR 34/2021, violators of these provisions for TKA shall be subject to administrative sanctions such as:
a. fines;
b. temporary suspension of the RPTKA approval procedure; and/or
c. revocation of an approved RPTKA.
The amount of fines will be calculated as per the sum: oF six million Rupiah (Rp6,000,000.00) per worker per month – up to a maximum of six months, counted from the first day the TKA concerned entered
Indonesia.