Uncategorized
Uncategorized
03Dec
Mutual Termination Agreements (PHK Sepakat) in Indonesia: Process and Best Practices
Introduction In 2020, a mid-sized technology company in Jakarta faced revenue declines during the pandemic. Instead of forcing layoffs, management sat down with employees to discuss a fair path forward. Together, they chose a mutual termination agreement (PHK Sepakat)—a solution that gave employees dignity in exit and kept the company compliant with Indonesian labor law. […]
02Dec
Resignation vs. Termination: Navigating Employee-Initiated Separation in Indonesia
Introduction In mid-2022, a fintech startup in Jakarta faced a sudden wave of resignations. Young employees, many from Gen Z, left after just one year, citing burnout and unclear career growth. Meanwhile, the HR team struggled with another issue—terminating underperforming staff. The company realized that understanding the difference between resignation and termination in Indonesia was […]
30Nov
Data Privacy in Indonesian HR: Compliance with PDP Law for Employee Data Handling
When a multinational tech company in Jakarta discovered that an HR officer had shared employee medical records over unsecured email, it triggered both panic and a compliance review. What seemed like a minor slip soon became a legal risk under Indonesia’s new Personal Data Protection Law (PDP Law – Law No. 27 of 2022). Legal […]
29Nov
Managing Sick Leave and Long-Term Absenteeism in Indonesia: Rights and Procedures
When a financial services company in Jakarta faced a situation where one of its senior analysts had to take extended leave due to a serious illness, HR was challenged to balance compassion with compliance. While the company wanted to support the employee, it also needed to ensure that the business operations and legal requirements were […]
28Nov
Handling Employee Misconduct: Investigations, Suspension, and Disciplinary Actions in Indonesia
When a manufacturing firm in Surabaya discovered that one of its supervisors was leaking confidential production data, management had to act quickly. However, instead of immediate dismissal, the company first initiated an internal investigation to ensure that any disciplinary action would comply with Indonesian labor law. Legal Framework Employee misconduct in Indonesia is governed under: […]
27Nov
Implementing Performance Improvement Plans (PIPs) in Indonesia: A Legal and Cultural Perspective
When an international tech company expanded to Indonesia, managers introduced a Western-style Performance Improvement Plan (PIP) to address underperforming employees. While common in global HR practices, the company quickly realized that applying PIPs in Indonesia required careful alignment with local labor law and cultural expectations. Legal Framework In Indonesia, employment relations are primarily regulated by: […]
26Nov
Conducting Lawful Performance Appraisals and Providing Feedback in the Indonesian Context
When an international retail company opened operations in Jakarta, management quickly realized that Western-style performance reviews—direct, numeric, and sometimes harsh—did not translate well in Indonesia. Employees felt uncomfortable, and some even reported unfair treatment to the HR department. This experience highlights the importance of conducting performance appraisals in a way that respects Indonesia’s legal and […]
25Nov
Guidelines for Employee Loans and Salary Deductions in Indonesia
When Maya, an HR manager in Jakarta, received multiple requests for employee loans, she faced a dilemma. How much could be deducted from salaries each month? And what legal limits apply under Indonesian labor law? Cases like this highlight the importance of clear policies on employee loans and salary deductions. Legal Framework According to Indonesia’s […]
24Nov
Expatriate Compensation Packages: Key Considerations for Indonesia (Tax Equalization, Housing, etc.)
When James, a senior manager from London, accepted an assignment in Jakarta, his excitement quickly turned to concern. Beyond salary, he wondered—how would housing, schooling for his children, and Indonesia’s complex tax rules be handled? His story is common among expatriates, making compensation design a critical issue for foreign employers. Expatriate compensation packages in Indonesia […]
23Nov
Salary Structure in Indonesia: A Guide to Gross vs. Net Pay and Allowances
When John, an expatriate manager, received his first salary slip in Jakarta, he was surprised. The “gross” figure in his contract looked generous, but after tax, BPJS contributions, and deductions, the “net” pay was much lower. This confusion is common for both foreign and local employees in Indonesia. Gross vs. Net Pay Employers must be […]
Recent Comments