What are 4 Company Obligations to Its Employees? (2)

SMART Legal Consulting
What are 4 Company Obligations to Its Employees? (1)
August 1, 2016
SMART Legal Consulting
3 Important Things to be Registered Agent or Distributor Company in Indonesia
September 21, 2016

Following our first article regarding company obligation to its employee, this article provides 2 others obligations which are as follows:

(3) To Give Leave and Rest

Every year the Employees has entitled rights to get Leave and Rest as set out  on Article 79 Manpower Law with the following details:





Break during working hours

Half an hour after working for 4 hours consecutively


Weekly Rest

1 day rest if working for 6 days a week; or

2 days rest if working for 5 days a week


Annual Leave

12 workdays if the worker already worked for 12 (twelve) months consutively


Long Rest

No less than 2 (two) months, which shall be awarded in the seventh and eight year of work each for a period 1 (one) month to employee who have been working for 6 (six) year consecutively at the same company on the condition that the said employee will no longer be entitled to their annual leave of rest in 2 (two) current years. This provision shall hencefort be applicaple every 6 (six) years of works.


Menstruation Rest for woman 2 days a month


Childbirth Rest for Female employee Female employee who give birth must get Break with following detail:

  1. 1.5 (one-and-a-half) month period of rest before the time at which the employee estimated by an obstetrician or midwife to givebirth to a baby
  2. 1.5 (one-and-a-half) month period of rest thereafter

Female employee who has a miscarriage is entitled to a period of rest 1.5 (one-and-a-half) months or a period of rest as stated in the medical statement issued by the obstetrician or midwife.

(4) Register the Employee to National Security Program

Article 99 Manpower Law regulates every employee and its family are entitled to manpower social security insurance which will be regulated specific regulations. The social security insurance itself then regulated on Law No.24 of 2011 on Social Security Administrator (“National Security Law”). Under the National Security Law, starting from 2015 every company should register their employees (both Indonesian and foreign) who work more than 6 (six) months  to the National Security Program which consists of 2 (two) items, as follows:

A. National Manpower Insurance (BPJS for Work)

The BPJS for Work consists  of several programs and proportion of premium that should be payable to the Social Security Administrator. The payment should be borne both by the Company and the Employee which can be deducted from Employees’s salary every months.


Payment Proportion (%)

Borne by employees

Borne by the Company

Provident Fund



Work-Related Accident


0.24 up to 1.74
(subject to level of risk in working environment)




Pension Plan



B. National Health Insurance (BPJS for Health)

The Company must register the Employee and maximum 5 (five) family member of the employee to BPJS for Health. The family member in this context can be wife/husband, legitimate childred (biological childred, stepchildred and/or adopted childred).

The premium of National Health Insurance must be paid by the employee and the Company with the following proportion: 1% is paid by the Employee and 4% must be paid by the Company.

If the Company fails to perform its obligations as mentioned above then the Company will be imposed with sanctions ranging from administrative sanction until criminal sanction that subject to the level of violations to their obligations. The administrative sanction can be a form of a rebuke, a written warning, limitation of the business activities of the Company, the business activities of the Company get freezed, cancellation of approval or registration of any license, temporary termination of partial or the whole production tools/instruments and abolishment/revocation of license or permission to operate. Whilst the criminal sanctions can be in form of jail for minimum 1 until 4 years and fine.



SMART Legal Consulting has extensive experience in helping employers/companies (both local and foreign company) to arrange Employment Arrangement (Company Regulation, Employment Contract and so forth). So, the company’s employment arrangement will comply with prevailing Indonesian law and regulations.

If you need immediate consultation, please arrange meeting with SMART Legal Consulting at:

E: info@smartcolaw.com

H: +62821-1234-1235

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Fairus Harris Senior Associate
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