Foreign Worker Utilization in Start-Up Company

“Start-up, innovative technology-based, Company excluded from the obligation in obtaining a Foreign Worker Utilization Plan (“RPTKA”) when they utilize a foreign worker for the maximum period of 3 (three) months. However, the Start-Up Company must submit the Foreign Worker data mentioned above to the Ministry or appointed authority.”

Startups are rooted in innovation, addressing the deficiencies of existing products or creating entirely new categories of goods and services, thereby disrupting entrenched ways of thinking and doing business for entire industries. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand.

A. Differences in Foreign Worker Utilization for Start Up Companies

In accordance with the Government Regulation Number 34 of 2021 Concerning Foreign Worker Utilization (“Government Regulation 34/2021”), Foreign Worker is foreigners that is holding a visa to work in Indonesia. Foreign Worker Employer (“Employer”) is a legal entity established based on the Indonesian Law or other entities that employs Foreign Worker by paying wages or other forms of appreciation.

According to Article 6 of Government Regulation 34/2021, every Employers that employ Foreign Worker is obligated to obtain a Foreign Worker Utilization Plan (“RPTKA”) that is validated by the Ministry or appointed authority. The Employer is obligated to submit the following documents:

1. Letter of Purpose;
2. Employer’s Business Identification Number and/or Business License(s);
3. Articles of Association and Deeds of Establishment by the Ministry of Law and Human Rights and its amendments;
4. Proof of Mandatory Worker Report;
5. Employment Agreement;
6. Organization structure;
7. Statement letter appointing the accompanying Indonesian Worker;
8. Statement letter stating to educate and train the Indonesian Worker to fulfill the position of the Foreign Worker;
9. Statement letter stating to facilitate the training of Bahasa Indonesia to the Foreign Worker

The Foreign Worker Data needed to be submitted are:

1. Educational Certification;
2. Competence and work experience certification;
3. Employment agreement;
4. Statement letter appointing the accompanying Indonesian Worker;
5. Statement letter appointing the guarantor of the Foreign Worker;
6. Bank statement of the Foreign Worker or Employer.

Though in accordance to Article 19 of Government Regulation 34/2021, the validation of RPTKA is excluded to the Foreign Worker employed by start-up technology-based companies. For start-up technology-based companies, they will only have to submit the Foreign Worker data as mentioned above to the Ministry or appointed authority.

It should be noted that the Foreign Worker utilized through this scheme is only allowed to work for the said company for up to 3 (three) months. If the said company wants to utilize the Foreign Worker for more than 3 (three) months, than the company would have to have an RPTKA that is validated by the Ministry or the appointed authority.

B. Foreign Worker Job Position

In accordance to Article 11 of Government Regulation 34/2021, Foreign Worker is not allowed to work in a position that governs personalia. The positions that Foreign Worker is not allowed to work in is detailed in the Ministry of Labor Decree Number 349 of 2019 Concerning Certain Positions That are Prohibited to Foreign Worker. The positions are as follows:

1. Personnel Director;
2. Industrial Relation Manager;
3. Human Resource Manager;
4. Personnel Development Supervisor;
5. Personnel Recruitment Supervisor;
6. Personnel Placement Supervisor;
7. Employee Career Development Supervisor;
8. Personnel Declare Administrator;
9. Personnel and Careers Specialists;
10. Personnel Specialist;
11. Career Advisor;
12. Job Advisor and Counseling;
13. Employee Mediator;
14. Job Training Administrator;
15. Job Interviewer;
16. Job Analyst; and
17. Occupational Safety Specialist.

C. Summary

If start-up technology-based companies wants to employ Foreign Worker, they are excluded from the obligations to obtain a validated RPTKA but if they employ Foreign Worker through this scheme, they can only employ that Foreign Worker for 3 (three) months. If they want to extend their employment, they would have to obtain a validated RPTKA.

Lastly, there are several positions that Foreign Worker are not allowed to work in. the positions are mainly regarding the handling of personalia in the company.

Author: Christian Chandra

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