May 22, 2016 |
The Ministry of Manpower is increasingly performing labor audits at foreign investment companies (PT PMA and Representative Offices) to find out any violations of applicable regulations. The labor audits are announced a couple of days before the actual inspection, which gives companies only limited time to prepare all required documents. The consequences of non-compliance with regulations may be profound.
Possible sanctions may vary from fines, deportation of expatriates and restrictions placed on foreign investment companies. In this column we discuss the documents generally required to be shown to manpower officials in labor audits at PT PMA companies or Representative Offices.
Documents Required to be Shown in a Manpower Labor Audit
Below we describe the documents which are generally required to be shown to the manpower officials on labor audits. The document requirements may slightly vary depending on the location and the business type of the foreign investment company.
Documents related to the legality of the company
• Investment licenses, such as the principle permit (Izin Prinsip), business license (Izin Usaha)
• The deed of establishment of the company, including its amendments of the articles of association. Usually the latest amendment of the articles of association is sufficient. However we advise clients to prepare all amendments
• The organization structure of the company
• The manpower report, better known as wajib lapor ketenagakerjaan
• The company regulations or collective labor agreement, whichever is applicable in the company
• The labor inspection certificate book (if any)
Documents related to work time and rest time
• An overview of absence of the employees
• An overview of annual leave of the employees
• An overview of leave take due to pregnancy, birth and miscarriage
Documents related to employment of employees and subcontractors
• Employment agreements of all employees of the company, including
• Employment agreements for permanent employees
• Employment agreements for fixed term employees
• Work contracts with subcontractors
• Outsourcing agreements related to the services which are outsourced to third parties
Documents related to wages
• An overview of the wages of all employees
• An overview of the overtime orders from the company to the employees
• An overview of the calculation of overtime wages for the overtime hours worked by employees
Documents related to security of manpower
• Proof of membership and payment of BPJS (social security) of all employees
• Proof of membership and payment of JSHK (social security outside working hours) of all employees
Documents related to the use of foreign workers
• The original RPTKA for each foreign worker
• The original IMTA for each foreign worker
• Proof of payment of the DPKK for each foreign worker
• Appointment letter(s) of Indonesian labor companion (TKI pendamping) for each foreign worker and proof of implementation of training and education of the local labor companion
• Existence report of the foreign workers
• Education certificates of the foreign workers
• The original KITAS of each foreign worker
• A copy of passport of each foreign worker
• Report on the use of foreign workers
Besides the above requirements, manpower officials often request in labor audits documents related to the occupational health and safety. These documents generally need to be supplied by the owner/ management of the building where the PT PMA holds its office.
Consequences of Non-Compliance
In case companies are not able to show the above documents to labor inspectors it may have severe consequences. Sanctions, depending on the type of violation, can include:
1. Deportation and deterrence of foreign workers;
2. Restrictions on companies, such as a restriction to hire foreign workers for a certain period of time; and
3. Criminal sanctions, with penalties ranging between IDR 10.000.000 and IDR 500.000.000 and possible imprisonment of up to 5 years.
Because of the severity of the sanctions in case of non-compliance by companies, legal assistance before and during the labor audits process is highly recommended.
