Employee Contract For Small Business Template for Indonesia

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Key Requirements PROMPT example:

Employee Contracts For Small Business

"I need an Employee Contract For Small Business template in Indonesia for hiring three new sales representatives starting March 2025, including commission structure and performance targets, with specific provisions for protecting our client database and trade secrets."

Document background
Employee Contracts For Small Business in Indonesia serve as essential legal documents that establish and govern the employment relationship between small business entities and their employees. These contracts must comply with Indonesian labor laws, particularly the Manpower Law (Law No. 13/2003) and the recent Omnibus Law reforms, while being practical and manageable for small business operations. The document is typically used when hiring new employees or formalizing existing employment relationships in small businesses with limited HR infrastructure. It includes crucial provisions on employment terms, compensation, benefits, working hours, leave entitlements, and termination procedures, all aligned with Indonesian regulatory requirements. The contract helps small businesses maintain legal compliance while protecting both employer and employee interests in a clear, straightforward manner.
Suggested Sections

1. Parties: Identification of the employer (company) and employee with complete legal names and addresses

2. Background: Brief context of the employment relationship and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Position and Duties: Employee's job title, role, responsibilities, and reporting structure

5. Term of Employment: Employment start date and whether the contract is fixed-term or permanent

6. Working Hours and Location: Standard working hours, workplace location, and any flexibility arrangements

7. Compensation and Benefits: Salary, payment schedule, and mandatory benefits as per Indonesian law

8. Leave Entitlements: Annual leave, sick leave, religious holiday leave, and other statutory leave rights

9. Social Security and Insurance: BPJS participation and other mandatory insurance coverage

10. Confidentiality: Protection of company's confidential information and trade secrets

11. Intellectual Property: Ownership of work products and innovations created during employment

12. Termination: Grounds for termination and procedures in accordance with Indonesian law

13. Governing Law: Confirmation of Indonesian law application and dispute resolution procedures

14. Signatures: Execution clause and signature blocks for both parties

Optional Sections

1. Probationary Period: Terms of initial probation period - include for permanent employees only

2. Non-Competition: Post-employment competition restrictions - include for senior positions or roles with access to sensitive information

3. Mobility Clause: Terms for potential workplace relocation - include if business has multiple locations

4. Commission Structure: Details of commission-based compensation - include for sales positions

5. Performance Reviews: Process and frequency of performance evaluations - include for permanent positions

6. Training Requirements: Mandatory training and professional development - include if specific qualifications are required

7. Overtime Arrangements: Terms for overtime work and compensation - include for non-managerial positions

8. Remote Work Provisions: Terms for working from home or remote locations - include if remote work is permitted

Suggested Schedules

1. Schedule A - Job Description: Detailed description of role, responsibilities, and performance expectations

2. Schedule B - Compensation Details: Breakdown of salary components, allowances, and benefits

3. Schedule C - Company Policies: Key company policies that form part of employment terms

4. Schedule D - Confidential Information: Specific details of confidential information and handling requirements

5. Schedule E - Employee Handbook Reference: Reference to relevant sections of employee handbook

6. Appendix 1 - Required Documents: List of documents employee must provide (ID, certificates, etc.)

7. Appendix 2 - Social Security Details: BPJS registration and contribution information

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Relevant Industries

Retail

Food and Beverage

Technology

Professional Services

Manufacturing

Construction

Healthcare

Education

Hospitality

Agriculture

Creative Industries

Transport and Logistics

Personal Services

Digital Services

Local Trade

Relevant Teams

Human Resources

Administration

Sales

Marketing

Operations

Finance

Customer Service

Production

Quality Control

Information Technology

Warehouse

Front Office

Business Development

Project Management

Relevant Roles

General Manager

Office Manager

Administrative Assistant

Sales Representative

Customer Service Representative

Operations Manager

Marketing Coordinator

Accountant

Store Manager

Shop Assistant

Technical Support Specialist

Production Supervisor

Warehouse Coordinator

Front Desk Officer

Digital Marketing Specialist

Business Development Executive

HR Coordinator

Quality Control Inspector

Receptionist

Project Coordinator

Industries
Law No. 13/2003 (Manpower Law): The primary employment law in Indonesia that regulates fundamental aspects of employment relationships including working hours, leave entitlements, termination procedures, and basic rights and obligations of employers and employees
Law No. 11/2020 (Omnibus Law): Recent reform law that amended various provisions of the Manpower Law, including changes to severance pay calculations, fixed-term contract regulations, and outsourcing provisions
Law No. 24/2011 on Social Security Administrative Bodies (BPJS): Regulates mandatory social security and healthcare insurance requirements for employees
Law No. 1/1970 on Work Safety: Establishes basic occupational health and safety requirements that must be addressed in employment relationships
Government Regulation No. 36/2021: Implementing regulation for wages, including minimum wage calculations and wage structure requirements
Law No. 40/2004 on National Social Security System: Framework law for social security benefits including health insurance, work accident insurance, death benefits, pension and retirement benefits
Minister of Manpower Regulation No. 4/2022: Recent regulation on procedures for drafting and registering company regulations, particularly relevant for small businesses
Government Regulation No. 35/2021: Specific regulation on fixed-term employment agreements, outsourcing, working hours, and rest periods
Regional Minimum Wage Regulations: Specific minimum wage regulations that vary by province and sector, which must be consulted based on the business location
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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