Uncategorized
Uncategorized
22Nov
Understanding THR (Tunjangan Hari Raya): The Mandatory Religious Holiday Allowance in Indonesia
When Rina, an office worker in Jakarta, received her Tunjangan Hari Raya (THR) before Eid, she immediately sent part of it to her parents in the village. For her family, THR was not just a financial bonus—it was a tradition that allowed them to celebrate the holidays with dignity. THR (Religious Holiday Allowance) is a […]
21Nov
Beyond BPJS: Designing Competitive Employee Benefit Packages to Attract Top Talent in Indonesia
When a promising software engineer in Jakarta received two job offers—one from a multinational company offering only the statutory BPJS benefits, and another from a local startup that provided health insurance top-ups, flexible work, and learning allowances—the decision was easy. The second offer felt more human-centric and competitive. In Indonesia, BPJS Kesehatan (healthcare) and BPJS […]
20Nov
The Onboarding Process in Indonesia: Essential Steps for Compliance and Culture Integration
In 2021, a Japanese manufacturing company opened a new plant in Bekasi and quickly hired over 200 workers. While recruitment was fast, many employees left within the first three months. Exit interviews revealed two key issues: incomplete legal documentation and a lack of cultural integration. This case highlights why structured onboarding in Indonesia is not […]
19Nov
Non-Compete and Confidentiality Clauses in Indonesian Employment Contracts: Are They Enforceable?
In today’s competitive business environment, protecting sensitive information is a priority for every employer. For foreign companies operating in Indonesia, two common contractual tools are non-compete and confidentiality clauses. Yet, their enforceability under Indonesian law is not as straightforward as in some other jurisdictions. The Legal Context Indonesia’s Manpower Law (Law No. 13/2003, amended by […]
18Nov
Fixed-Term Contracts (PKWT) in Indonesia: Duration, Limits, and Conversion Rules
When a technology start-up from Singapore entered Jakarta in 2021, they hired software developers under fixed-term contracts (PKWT) to test the market. After two years, some contracts were extended again—until employees challenged the arrangement, arguing that the law required conversion into permanent status. The case highlighted the strict limits surrounding PKWT in Indonesia. What is […]
17Nov
Outsourcing in Indonesia: Understanding the Rules for Agency Workers (Alih Daya)
When a multinational retailer expanded into Surabaya, they faced staffing challenges during seasonal peaks. Instead of directly hiring hundreds of short-term workers, they turned to an outsourcing agency. However, mismanaging outsourcing rules in Indonesia can lead to costly disputes—something every employer should be cautious about. What is Outsourcing (Alih Daya)? Outsourcing in Indonesia allows companies […]
16Nov
Hiring Foreigners in Indonesia: A Guide to Expat Work Permits (IMTA/KITAS) and Localization Rules
When Michael, a senior engineer from Germany, was recruited by a manufacturing company in Jakarta, his employer faced an important challenge: securing the right permits for him to legally work in Indonesia. This is a story familiar to many foreign employers, where compliance with expatriate labor regulations is not only a legal requirement but also […]
15Nov
The Role of Unions and Collective Labor Agreements in Indonesia
Introduction Unions play a central role in shaping Indonesia’s industrial relations. For foreign employers, understanding how unions function and how Collective Labor Agreements (Perjanjian Kerja Bersama – PKB) work is essential for compliance and effective workforce management. Real Case: Strikes at Freeport Indonesia In 2011, Freeport Indonesia, one of the largest mining companies in Papua, […]
14Nov
Employee Leave Entitlements in Indonesia: Annual, Sick, Maternity, and More
Introduction Leave entitlements in Indonesia are not only statutory obligations but also a reflection of how companies respect employee welfare. For foreign employers, understanding these entitlements is critical to avoid disputes and to build a compliant and trusted workplace. A Real Case: When Leave Became a Legal Dispute In 2021, a multinational company in Jakarta […]
13Nov
A Guide to Drafting a Compliant Indonesian Employment Agreement (PKWT, PKWTT & PKHL)
In Indonesia, an employment agreement is more than a formality — it is a legally binding document that determines an employer’s compliance and an employee’s protection. For foreign employers, drafting the correct type of contract is essential to avoid disputes and unexpected liabilities. Types of Employment Agreements in Indonesia 1. PKWT (Fixed-Term Employment Agreement) PKWT […]
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