Employee Retention Bonus Agreement Template for Indonesia

The Employee Retention Bonus Agreement is a strategic document used by organizations in Indonesia to secure the continued employment of valuable staff members during critical periods such as mergers, acquisitions, major projects, or organizational transitions. This agreement type is particularly important in the Indonesian market, where talent retention can be challenging and must be managed within the framework of local employment laws. The document specifies the bonus amount, retention period, payment terms, and conditions while ensuring compliance with Indonesian labor regulations, particularly Law No. 13/2003 on Manpower and relevant tax provisions. It serves as a formal commitment between the employer and employee, providing clarity on the retention terms while protecting both parties' interests through clear documentation of obligations and rights.

1. Parties: Identification of the employer company and the employee, including their respective addresses and details

2. Background: Context of the agreement, including the purpose of retention bonus and the employee's value to the company

3. Definitions: Key terms used throughout the agreement, including 'Retention Period', 'Bonus Amount', 'Trigger Events', etc.

4. Retention Bonus Amount: Specifies the total bonus amount and any breakdown of payments

5. Retention Period: Defines the duration of the retention period and key dates

6. Payment Terms: Details of how and when the bonus will be paid, including any installments

7. Conditions for Payment: Requirements that must be met for the bonus to be paid, including continued employment

8. Termination Provisions: Circumstances under which the agreement may be terminated and consequences

9. Repayment Obligations: Conditions under which the employee might need to repay the bonus

10. Tax Treatment: Clarification of tax implications and responsibilities

11. Confidentiality: Requirements to keep the terms of the bonus agreement confidential

12. Governing Law: Specification that Indonesian law governs the agreement

13. Entire Agreement: Standard clause confirming this document represents the complete agreement between parties