Hiring expatriates (TKA) can bring valuable skills and global experience to Indonesian companies. However, mistakes in managing expatriate employment often result in sanctions for employers and risks for expatriates themselves. Government Regulation No. 34 of 2021, Minister of Manpower Regulation No. 8 of 2021, and Immigration Law No. 6 of 2011 set out strict requirements. This article explains the common mistakes employers must avoid, the legal articles that apply, and the consequences of non-compliance.
Indonesia welcomes expatriates but requires companies to follow specific rules to protect the local labor market. Employers must obtain a Foreign Worker Utilization Plan (RPTKA) and a work permit (IMTA or its successor in OSS) before a foreign worker can legally work. They must also ensure expatriates hold the right visa and residence permit. Failure to comply exposes both the employer and the expatriate to administrative, financial, and even criminal sanctions.
When Employers May Face Sanctions?
- No RPTKA or Work Permit
According to Article 6 paragraph (1) of PP 34/2021, employers must obtain approval of the Foreign Worker Utilization Plan (RPTKA) before hiring expatriates. If they employ a foreign worker without RPTKA approval, Articles 35–37 of PP 34/2021 provide administrative sanctions, including fines, suspension, and revocation of permits.
- Incorrect Position or Job Title
Article 4 of PP 34/2021 provides that expatriates may only be employed in certain positions and for a limited period. If a foreign worker’s actual duties differ from the approved job description, or if the position is reserved for Indonesian nationals, the employer is in violation.
- Wrong Workplace Location
Employers must ensure the workplace location matches the one reported in the RPTKA. Under Article 12 of Minister of Manpower Regulation No. 8/2021, any change in location requires notification. Failure to report may result in administrative sanctions.
- Inaccurate Residence or Address
Foreign workers are required to live at the address reported to immigration. Article 71 of Immigration Law No. 6/2011 requires foreigners to provide accurate data, including address. Employers who ignore this obligation may be sanctioned for not ensuring compliance.
- Not Updating and Reporting Data Changes
When there are changes in passport data, residential address, or company information, employers must update work permits and residence permits. Articles 27-29 of GR 34/2021 obliges employers to report such changes to the Ministry of Manpower. If ignored, this constitutes a violation subject to administrative sanctions.
Types of Sanctions for Employers
The government prioritizes administrative sanctions before escalating to harsher measures. Under Articles 37–38 of GR No. 34/2021 and Articles 47 and 49–53 of Minister of Manpower Regulation No. 8/2021, employers who misuse foreign worker permits may face:
- Written warnings, as an initial corrective measure.
- Administrative fines, calculated per foreign worker and position, ranging up to IDR 36 million for prolonged violations.
- Suspension or revocation of approvals, such as the RPTKA or the company’s operating license, if violations persist.
- Immigration consequences, including deportation of the expatriate, in cases involving immigration status, with fines for overstaying permits regulated separately under Article 75 of Law No. 6/2011 on Immigration.
For employers, these sanctions not only carry financial costs but may also harm reputation and restrict future access to foreign workers.
Risks for Expatriates
Expatriates themselves also face risks if their employer fails to follow the law.
- Immigration consequences: According to Article 75 of Immigration Law No. 6/2011, expatriates can be deported if they are proven to misuse their residence permit, work outside their approved job, or stay at a different address.
- Uncertainty of legal status: If the employer fails to update data or renew permits, expatriates may be classified as overstayers, which carries fines and possible entry bans.
- Employment termination: An expatriate working in a non-approved job or location risks termination if the Ministry of Manpower revokes the company’s RPTKA approval.
Thus, compliance protects not only employers but also the expatriates they employ.
Institutional Roles and Best Practices for Employers
The Ministry of Manpower issues and monitors RPTKA approvals and regulates employer obligations, while the Directorate General of Immigration manages residence permits (KITAS/ITAS) and ensures expatriates report address changes. The OSS (Online Single Submission) system integrates some processes, but employers remain responsible for data accuracy, and coordination between institutions means that a violation detected in one area, such as an immigration inspection, can trigger sanctions in manpower administration. To avoid these risks, employers should prepare accurate documentation so that the RPTKA, employment contracts, and immigration data align with the actual job description, workplace, and residence. They must also promptly report any changes in address, job role, or company information, provide training for HR teams so they fully understand manpower and immigration regulations, and closely monitor permit validity by setting up internal reminders to renew them before expiry to prevent overstaying violations.
Conclusion
Hiring expatriates in Indonesia offers many benefits, but it also requires strict compliance with manpower and immigration rules. The most common mistakes such as hiring without RPTKA, assigning the wrong position, reporting the wrong workplace, failing to update data, or overlooking residence requirements can expose both employers and expatriates to serious risks. By understanding the legal framework and applying best practices, companies can avoid sanctions, protect their reputation, and ensure that expatriates contribute productively within a secure legal status.
Author: Chelsya Mulyadi
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