Full Time Contract Template for Indonesia

A Full Time Contract is the cornerstone document for establishing permanent employment relationships in Indonesia. This comprehensive employment agreement ensures compliance with Indonesian labor laws while protecting both employer and employee rights throughout the employment relationship.

When do you need this document?

You need a Full Time Contract when hiring permanent employees in Indonesia for indefinite-term positions. This document is essential when establishing employment relationships that exceed the probationary period, when converting contract employees to permanent status, or when hiring employees for managerial, professional, or operational roles. Indonesian law requires written employment agreements for all permanent positions, making this contract legally mandatory rather than optional. You'll also need this document when employees will receive full benefits packages, including social security coverage through BPJS, annual leave entitlements, and other statutory benefits required under Indonesian employment law.

Key legal considerations

Several critical legal elements must be addressed in your Full Time Contract. The probationary period cannot exceed three months under Indonesian law, and specific terms regarding performance evaluation during this period must be clearly defined. Compensation clauses must comply with regional minimum wage requirements and include mandatory overtime calculations. The contract must specify working hours, which generally cannot exceed 8 hours per day or 40 hours per week, with clear provisions for overtime compensation. Termination clauses require careful drafting to ensure compliance with severance calculation requirements under the amended Manpower Law. Additionally, the contract must include provisions for mandatory social security registration through BPJS Ketenagakerjaan and BPJS Kesehatan, as failure to provide these benefits can result in legal penalties for employers.

Legal requirements in Indonesia

Indonesian employment law mandates specific requirements for Full Time Contracts under Law No. 13 of 2003 and subsequent amendments through the Job Creation Law. The contract must be written in Indonesian language (Bahasa Indonesia) and signed by both parties with witness signatures where required. Employers must register the employment relationship with local manpower authorities within 30 days of contract execution. The document must comply with Government Regulation No. 36 of 2021 regarding wage structures and include provisions for annual leave (minimum 12 working days), religious holiday allowances, and sick leave entitlements. Work safety provisions must align with Law No. 1 of 1970, particularly for positions involving occupational hazards. The contract must also specify dispute resolution mechanisms, preferably through Indonesian labor courts, and include clauses regarding confidentiality and non-compete agreements that comply with local enforceability standards. Finally, any contract modifications must be documented through written amendments signed by both parties.