Penalty for Employing Foreign Workers Illegally

Nov 25, 2022 | Employment

Employment of Foreign Workers (TKA) in Indonesia is increasingly being carried out by companies to reach out to the market’s needs and fill in the gaps in skills that cannot be fulfilled by local workers. In Indonesia, the government allows authorized business entities to employ foreign workers. Employment of foreign workers can be carried out by any party in accordance with the provisions except the individual employer. In this case, employer of foreign workers shall be legal entities established under Indonesian law or another entity that employs foreign workers by paying wages or other forms of remuneration.

The utilization of foreign workers by Indonesian employers to response the limited human resources and to accommodate specific skills that cannot be fulfilled by local workers. Based on Article 1 of Government Regulation Number 34 of the year 2021 concerning the Use of Foreign Workers, TKA is defined as a citizen who has a visa with the intention of working in the territory of Indonesia. The Government Regulation applies the provisions of Articles 81 and 185 letter (b) of Law Number 11 of 2020 concerning Job Creation (UU Cipta Kerja) and encourages the acceleration of national development through the employment of foreign workers, but remains selectively and pays attention to the requirements for foreign workers to be employed.

So, what are the Penalties for Employing Foreign Workers Illegally? Recruitment of foreign workers is not only about visas, companies that want to employ foreign workers must fully understand and comply the laws and regulations regarding foreign workers to avoid legal risks so the business goals can be carried out properly. Employing foreign workers is carried out through very strict mechanisms and procedures, especially by making it mandatory for companies or corporations that use foreign workers to work in Indonesia by making Foreign Workers Utilization Plan (or Rencana Penggunaan Tenaga Kerja Asing/“RPTKA” in Indonesian). There are penalties that shall be borne by employers of foreign workers in terms of violation of regulations for the employment of foreign workers based on the Minister of Manpower Regulation Number 8 of 2021 based on Article 49 paragraph 2 of this Ministerial Regulation, Employers of Foreign Workers in terms of violation of the regulations of utilization of foreign workers are given administrative sanctions in the form of:

  1. fine;
  2. temporary suspension of the application process for Ratification of RPTKA; and/or
  3. revocation of Ratification of RPTKA.

 

In addition to RPTKA, the employment of foreign workers that do not comply the rules specified in the laws and regulations in Indonesia is considered as illegally employing foreign workers. Company owners who require the presence of foreign workers in the company must understand and comply everything related to foreign workers in order to avoid problems and sanctions related to licensing the employment of foreign workers who do not comply with applicable regulations. Should you have any further questions regarding this article, or other questions regarding the Employment Law of Foreign Workers and its permits, please feel no hesitation to contact us at info@rahlegalexperts.com. Looking forward to serve you.

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