Employment Contract Foreign Worker Template for Indonesia
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What is a Employment Contract Foreign Worker?
The Employment Contract Foreign Worker is a legally required document for any foreign national working in Indonesia. It must comply with Indonesian labor law, particularly Law No. 13 of 2003 on Manpower and Minister of Manpower Regulation No. 16 of 2015. This document is essential for obtaining and maintaining work permits (IMTA) and stay permits (KITAS) in Indonesia. It should be drafted in both Indonesian and English languages, with the Indonesian version prevailing in case of disputes. The contract must include specific provisions required for foreign workers, such as fixed-term duration (as permanent contracts are generally not permitted for foreign workers), technology transfer obligations, and compliance with local employment regulations. This document is typically required during the work permit application process and must be registered with the Ministry of Manpower.
About the Employment Contract Foreign Worker
An Employment Contract Foreign Worker is a critical legal document that establishes the employment relationship between an Indonesian company and a foreign national worker. Under Indonesian law, this contract is mandatory for all foreign workers and serves as the foundation for work permit applications and compliance with local employment regulations.
When do you need this document?
You need this contract whenever an Indonesian company hires a foreign worker for any position. The document is required before applying for an IMTA (work permit) and KITAS (stay permit) through the Ministry of Manpower and Immigration Authority. It's also necessary when renewing existing work permits, changing employment terms, or transferring a foreign worker between Indonesian entities. The contract must be finalized and signed before the foreign worker begins employment or applies for their initial work visa.
Key legal considerations
The contract must include several mandatory provisions under Indonesian law. Foreign workers can only be employed on fixed-term contracts, not permanent agreements, with specific maximum durations depending on the role. Technology transfer obligations must be clearly outlined, requiring the foreign worker to train Indonesian counterparts. The contract must specify compliance with local minimum wage requirements, working hours limitations, and leave entitlements as prescribed by Law No. 13 of 2003. Additionally, the agreement should address termination procedures, confidentiality obligations, and the employer's responsibility for repatriation costs upon contract completion.
Legal requirements in Indonesia
Under Indonesian law, the employment contract must be drafted in both Indonesian (Bahasa Indonesia) and English, with the Indonesian version taking precedence in legal disputes. The document requires registration with the Ministry of Manpower as part of the RPTKA (foreign worker employment permit) process. Government Regulation No. 35 of 2021 mandates that certain positions must demonstrate unavailability of qualified Indonesian workers before hiring foreign nationals. The contract must also comply with Minister of Manpower Regulation No. 16 of 2015 regarding specific procedures for foreign worker employment, including mandatory training programs and reporting requirements to Indonesian authorities.
GOVERNING LAW
Applicable law
This Employment Contract Foreign Worker is drafted to comply with Indonesia law. Key legislation includes:
Law No. 6 of 2011 on Immigration: Regulates the entry, presence, and exit of foreigners in Indonesia, including visa requirements and stay permits for foreign workers
Minister of Manpower Regulation No. 16 of 2015 on Procedures for the Use of Foreign Workers: Specific regulation governing the employment of foreign workers, including requirements for obtaining work permits (IMTA) and foreign worker employment permits (RPTKA)
Government Regulation No. 35 of 2021: Implementation regulation for Job Creation Law, including provisions on foreign worker employment, fixed-term contracts, outsourcing, working hours, and wages
Law No. 24 of 2011 on Social Security Administrative Bodies (BPJS): Mandates participation in Indonesia's social security programs, including health insurance and employment social security for foreign workers
Law No. 36 of 2008 on Income Tax: Governs taxation of employment income, including specific provisions for foreign workers and tax obligations
Minister of Manpower Regulation No. 8 of 2021: Updated regulation on procedures for foreign worker utilization plans and work permits, including online submission requirements
Presidential Regulation No. 20 of 2018: Regulation on the use of foreign workers, including positions that can be held by foreign workers and requirements for technology transfer and training
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