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The Job Loss Guarantee Program in Indonesia

KSP LEGAL UPDATES The Job Loss Guarantee Program in Indonesia gambar legal updates march 2021 websiteThe Job Loss Guarantee Program in Indonesia
Termination of Employment (Pemutusan Hubungan Kerja - PHK) have increased due to the impact of Covid 19 Pandemic on the economy in Indonesia. This is of particular concern to the Indonesian Government, hence President Joko Widodo ratified and issued the Government Regulation Number 37 of 2021 concerning Implementation of Job Loss Guarantee Program on February 21, 2021 ("PP 37/2021").

The Job Loss Security Program (Jaminan Kehilangan Pekerjaan - JKP) is a social security provided to workers/laborers who experience termination of employment. The owner of the company/entrepreneur is obliged to register its workers/laborers in the JKP program organized by Social Security Administrator for Employment (BPJS Ketenagakerjaan) in order to maintain a decent standard of life when the workers/laborers loss their jobs.

The requirements to become a JKP program participant are Indonesian citizens, still under 54 years of age when registering and have a working relationship with the Company. Furthermore, workers/laborers must also have been registered in the Health Insurance Program (Jaminan Kesehatan - JKN) as a recipient of wages at a business entity, Work Accident Security (Jaminan Kecelakaan Kerja - JKK), Old Day Security (Jaminan Hari Tua - JHT), Pension Security (Jaminan Pensiun - JP) and Death Security (Jaminan Kematian - JKM), specifically JP is not required for micro and small businesses.

The JKP contribution is 0.46% of the monthly Wages which must be paid every month. The Central Government will bear 0.22% of the monthly wages, while the rest is a recomposition of the Work Accident Security (JKK) and the Death Security (JKM) program contributions. The maximum nominal JKP contribution does not exceed the upper limit of the Wage, which is IDR 5.000.000,00 (five million Indonesian Rupiah). This contribution is then paid through BPJS Ketenagakerjaan which also has data integration with Social Security Administrator for Health (BPJS Kesehatan) membership data.

Based on Article 19 PP 37/2021, JKP benefits can be received by participants who experience Termination of Employment (PHK), both for work relationships based on an Indefinite Work Agreement (Perjanjian Kerja Waktu Tidak Tertentu - PKWTT) or Definite Time Work Agreement (Perjanjian Kerja Waktu Tertentu - PKWT) and later JKP beneficiaries must be willing to work again. However, JKP benefits cannot be given to participants who experience Termination of Employment (PHK) due to resignation, permanent total disability, retirement and death.

Some of the benefits that will be received by JKP program participants are in the form of:
a. cash given every month for a maximum of 6 (six) months, whereby 45% of the monthly Wages for the first 3 (three) months and 25% of the monthly Wages for the following 3 (three) months. The upper limit of the Wage is IDR 5.000.000,00 (five million Indonesian Rupiah).
b. access to job market information, in the form of providing job vacancy data in accordance with statutory provisions and/or providing job guidance in the form of self-assessments and/or career counseling services.
c. job training, which can be held in the form of in-person or online training which is organized by training institutes either owned by the government or private sector.

KSP Law Office provides legal consultancy to clients related to the Job Loss Guarantee Program or other manpower related matters, please call us at +62 21 3972 2042 or drop us an email at mail@ksplaw.co.id.
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