Omnibus Jobs Bill

Ruserious

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So the government passed the Omnibus jobs bill quickly and somewhat secretively, all whilst deterring protests about it. Whilst that doesn't seem good for democracy maybe it was the only way to pass it and make some desperately needed changes to employment laws in Indonesia. Saying that though no doubt the politicians have included a whole range of added extras. So what do you guys think of this bill, will it make significant changes to Indonesia and will they be positive?
 

R Cameron

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I have only seen simple news reports with little detail, though mentioning that it is 905 pages, so I will not be reading it all! Has anyone found a good summary? Has anyone seen specific changes relevant to foreign workers, investment, taxes, etc?
 

dafluff

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The damn thing is 900+ pages long. Here is a LINK.

It basically replaces sections of a bunch of laws, from fishing laws, to environmental protection, to hospitals, to investment. Of particular interest to the forum maybe the changes in the the Employment Law (UU 13/2003 - Ketenagakerjaan) and Immigration Law (UU 6/2011 - Keimigrasian)

I had a quick browse through, the only thing that I found interesting in the immigration law is that there is now the possibility of a second home KITAS/P. There is also the possibility for foreigners to own apartments with a hak milik title, however the land it sits on is still HGB.

Also a possibility to immediately convert VITAS to KITAS at the border (no need to go to immigration to convert).

Please note that all of these are contingent on further regulations as usual (PP, Perpres, Permen...etc).

Will post more if I find anything else interesting.
 

dafluff

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Is this the bill that covers expat tax too, or will that be another one?
If you are looking for the rumored "expats only pay taxes on Indonesian income", then here it is:

Dikecualikan dari ketentuan sebagaimana dimaksud pada ayat (1), warga negara asing yang telah menjadi subjek pajak dalam negeri dikenai Pajak Penghasilan hanya atas penghasilan yang diterima atau diperoleh dari Indonesia, dengan ketentuan: a. memiliki keahlian tertentu; dan b. berlaku selama 4 (empat) Tahun Pajak yang dihitung sejak menjadi subjek pajak dalam negeri.

So a special class of skilled workers (to be determined by the Minister of Finance) will only pay taxes on income gained in Indonesia, and then only for the first 4 years. Pretty sure this rules out just about anyone here... :ROFLMAO:
 

Helpful Herbert

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I was looking at pasal 156 about employment termination. It still seems to me to be pretty generous. If someone is terminated after 9 years they would receive:
Article 156-2 - severance pay - 9 months salary
Article 156-3 - service tenure award - 4 months salary
So total 13 months salary.

if I'm reading it correctly ...


this is from the guardian:
According to a draft version of the bill, mandatory paid leave for childbirth, weddings, baptism and bereavement will be scrapped, as will menstrual leave for women. Work overtime will be increased to four hours a day, and mandatory severance benefits paid by employers will be reduced, from 32 times monthly wages, to 19 times monthly wages. The state will also pay six months worth of wages to the person concerned.

Regulatory hurdles designed to protect the environment will also be reduced, with only high-risk investments required to obtain a permit or carry out an environmental impact assessment prior to beginning operations. Though permits are normally granted by local authorities, central government will gain the power to take over this process in some cases.

Restrictions placed on foreign participation in some sectors will be eased, and the government will set up a land bank and manage this to acquire land for public interest and redistribute the land.
 
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Dave70

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If you hire someone and wish to fire him a few months later (but less than a year), you will have to pay severance equivalent to a month's salary. I don't think that's helping in creating employment, it is not fair for businesses and will discourage them from hiring.
 

ChrisTex

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Or it will mean they will either train the employees better or the hope the employees will quit.

On a serious note, what percentage of employees will know their rights in regards to this?
 

dafluff

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I was looking at pasal 156 about employment termination. It still seems to me to be pretty generous. If someone is terminated after 9 years they would receive:
Article 156-2 - severance pay - 9 months salary
Article 156-3 - service tenure award - 4 months salary
So total 13 months salary.

if I'm reading it correctly ...
It's not pasal 156, it's pasal 81 of the new law, which changes a bunch of pasals in UU 13/2003, including pasal 156. (The whole Omnibus law is structured confusingly like this. One pasal to replace a bunch of pasals in a different law).

The amounts of severances and service tenure award were not changed from the 2003 law. The only thing that changed in pasal 156 is the removal of a 15% allowance for housing and medical costs.

Now note that the old pasal 156 calculation is in case the company goes bankrupt, suffers loss 2 years running, force majeure etc. If the company terminates the employee due to redundancy, then the severance pay was calculated as 2x written in 156.2 (article 163 old law).

The new law removes the 2x rate for those terminated due to redundancy.
 

dafluff

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If you hire someone and wish to fire him a few months later (but less than a year), you will have to pay severance equivalent to a month's salary. I don't think that's helping in creating employment, it is not fair for businesses and will discourage them from hiring.
This has not changed, and was the law since 2003.
 

HappyMan

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I had an employee, Bob, that just literally stopped coming to work one day, without technically quitting. Bob would then show up once every week (or was it every 2 weeks...) to legally maintain that he had not abandoned the job. Bob'd just sit at his desk for half an hour and then leave with a random excuse. When I confronted him he said that he wanted to be fired, so he could get severance pay...

I eventually discovered that Bob had been "borrowing" company funds and had failed to return them. There were receipts and witnesses (a supplier whom Bob had told payment was pending, after Bob removed the allocated funds from a company account). Bob then ceased appearing in the office and offered (by phone) to return the "borrowed" money, if and after I would grant him severance pay. Those who are fired for theft or fraud are not entitled to severance pay, as I understand matters.

Bob still has the audacity to list my company as his former employer on LinkedIn.

While I am largely on the side of protecting employees from unscrupulous employers, there is something to be said for having that shoe on the other foot.
 

Banana72

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Quick search using that link from dafluff....my brief thoughts/wish:
1. So foreigners can own an apartment (or more I guess..) with Hak Milik....it still hasn't said anything about a minimum value allowed...versus previous rumors of minimum of 5 billion (?) rupiah. Good: I can own something. Bad: Prices might get jacked up more once the new investors/foreigners with money coming in...
2. The PHK/Pesangon....even though it's reduced...in reality, many companies cannot afford to pay 19 months of salary. I guarantee and bet you many companies actually negotiate with the employees...(and believe me they're the nice ones!) on the agreed amount....some don't even negotiate and probably over 2-3 months salary tops if you've worked under 5 years. Do it the way they do it in the US, slightly modify it to make the employee obligated to pay for their unemployment. Current BPJS/BPTK deductions don't work unless they change the definition of 'Upah' as Total Compensation vs main salary. Many of the workers as I am sure many are still working with salary under the UMR. Mork with a combination of salary, overtime, uang makan (meal "stipend"), as well as other incentives (fixed transport, etc) which if added, quite a few makes a bit more than the UMR.
3. I wish there's a revision that gets rid of that pesky $1,200/year foreigners fee...especially for ex-WNIs and non-TKA/spouse sponsored KITAP holders.
4. Unless specified differently in the prenup/post nup, foreigner can own ONE original house owned by the spouse or(and?) property acquired through inheritance.

Well, enough dreaming from me for now...just my thoughts.
 

Banana72

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If you are looking for the rumored "expats only pay taxes on Indonesian income", then here it is:

Dikecualikan dari ketentuan sebagaimana dimaksud pada ayat (1), warga negara asing yang telah menjadi subjek pajak dalam negeri dikenai Pajak Penghasilan hanya atas penghasilan yang diterima atau diperoleh dari Indonesia, dengan ketentuan: a. memiliki keahlian tertentu; dan b. berlaku selama 4 (empat) Tahun Pajak yang dihitung sejak menjadi subjek pajak dalam negeri.

So a special class of skilled workers (to be determined by the Minister of Finance) will only pay taxes on income gained in Indonesia, and then only for the first 4 years. Pretty sure this rules out just about anyone here... :ROFLMAO:
Forget the tax (I do believe we do need to pay them somehow at least not at the high rate in Europe)..let's start with getting rid of that damn $1,200 for non-TKA (Tenaga Kerja Asing) KITAP holders...and freedom to work anywhere...PT or not. Ironically, Indonesia might get more actual tax income from foreigners working than many Indonesian workers who might fudge their taxes quite a bit.
 

gemima

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I had an employee, Bob, that just literally stopped coming to work one day, without technically quitting. Bob would then show up once every week (or was it every 2 weeks...) to legally maintain that he had not abandoned the job. Bob'd just sit at his desk for half an hour and then leave with a random excuse. When I confronted him he said that he wanted to be fired, so he could get severance pay...

I eventually discovered that Bob had been "borrowing" company funds and had failed to return them. There were receipts and witnesses (a supplier whom Bob had told payment was pending, after Bob removed the allocated funds from a company account). Bob then ceased appearing in the office and offered (by phone) to return the "borrowed" money, if and after I would grant him severance pay. Those who are fired for theft or fraud are not entitled to severance pay, as I understand matters.

Bob still has the audacity to list my company as his former employer on LinkedIn.

While I am largely on the side of protecting employees from unscrupulous employers, there is something to be said for having that shoe on the other foot.
l have a similar experience with a "Bob" in my company when I first moved here. I also agree that workers rights are important but some of the employment law here was really really restrictive and bad for business.
 

Dave70

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Or it will mean they will either train the employees better or the hope the employees will quit.
Some employees are just "untrainable", and some are like "Bob", they don't quit.

Not necessarily as bad as HappyMan's "Bob", but he was cute as a cat when applying for work, and within a short period, the cat has become a fearsome tiger.

On a serious note, what percentage of employees will know their rights in regards to this?
During this time of social media, more and more are becoming well-informed.
 

HappyMan

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Has anyone seen the worker protests in Bandung and other cities? Someone sent me a video of a protest going under the flyover at Dago. It looked lively, to say the least. Terrifying, actually. So many people so fired up...
 

dafluff

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Has anyone seen the worker protests in Bandung and other cities? Someone sent me a video of a protest going under the flyover at Dago. It looked lively, to say the least. Terrifying, actually. So many people so fired up...
Some of the demos have turned violent.

 

ChrisTex

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I have seen some videos of the demos. Police are using the water cannon in one of them since people are throwing traffic cones.

The other looks like it is happening 5 minutes away near ITC Roxy. That video looked peaceful. Everyone driving/walking slowly down the road.
 

Bad_azz

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Has anyone seen the worker protests in Bandung and other cities? Someone sent me a video of a protest going under the flyover at Dago. It looked lively, to say the least. Terrifying, actually. So many people so fired up...
 

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