Job Agreement Template for Indonesia

A Job Agreement is the fundamental legal document that establishes and governs the employment relationship between companies and individuals in Indonesia. Under Indonesian labor law, this contract is mandatory for all employment arrangements and must comply with strict regulatory requirements to ensure both employer and employee protection.

When do you need this document?

You need a Job Agreement whenever hiring employees in Indonesia, whether for permanent positions, fixed-term contracts, or specific project-based work. This includes situations where you're expanding your Indonesian operations, hiring local staff for your subsidiary, or engaging Indonesian workers for your business activities. The document is also required when converting existing work arrangements into formal employment relationships, promoting employees to new positions with different terms, or when Indonesian labor authorities request documentation of your employment practices.

Key legal considerations

Your Job Agreement must include several mandatory provisions under Indonesian law. The contract must specify the employee's basic salary, which cannot be below the regional minimum wage, along with any allowances, overtime compensation, and benefits structure. Social security enrollment is mandatory, requiring contributions to BPJS Kesehatan (health insurance) and BPJS Ketenagakerjaan (employment social security). The agreement must clearly define working hours, which generally cannot exceed 8 hours per day or 40 hours per week, along with rest periods and annual leave entitlements. For fixed-term contracts, you must specify the exact duration and renewal conditions, as these cannot exceed 3 years including extensions. Termination procedures and severance calculations must comply with Indonesian regulations, including proper notice periods and compensation requirements.

Legal requirements in Indonesia

Indonesian employment law mandates that Job Agreements be written in Bahasa Indonesia and include specific clauses required by Law No. 13 of 2003 on Manpower and Government Regulation No. 35 of 2021. The contract must identify both parties with complete legal details, specify the job position and duties clearly, and outline the employment term. Salary and benefits must comply with regional minimum wage standards and include mandatory social security contributions. The agreement must address workplace safety obligations under Law No. 1 of 1970 on Work Safety, including the employer's duty to provide a safe working environment and necessary safety equipment. Any disciplinary procedures must follow due process requirements, and termination clauses must align with Indonesian labor law provisions for lawful dismissal, severance pay, and notice periods. Foreign employers must ensure their agreements comply with investment law requirements and any sector-specific regulations that may apply to their industry.