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Insurance Requirement For Employers Of Short-Term Foreign Workers In Indonesia – Insurance Laws and Products

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Employers that hire foreign workers (Tenaga Kerja
or “TKA”) to work in
Indonesia for less than six months must now register the TKA in an
insurance program that at least guarantees protection for work
accidents. This requirement is governed under Article 8 of
Government Regulation No. 34 of 2021 regarding the Employment of
Foreign Workers (“GR 34”).

Prior to the issuance of GR 34, insurance for TKA was not
regulated under Law No. 13 of 2003 regarding Manpower or the 2020
Job Creation Law, which amended the Manpower Law. Note that GR 34
also regulates that TKA hired to work in Indonesia for more than
six months must be registered with Indonesia’s Social
Security Organizing Body (Badan Penyelenggara Jaminan
 or “BPJS”).

The foreign worker insurance requirement is further regulated by
Ministry of Manpower (“MOM”) Decree
No. 146 of 2021 regarding Insurance Program for Foreign Workers
Working Less Than Six Months and Directorate General of Manpower
Placement and Expansion of Employment Opportunities Decree No.
3/144/PK.04/V/2022 regarding the Implementation of Insurance
Program for Foreign Workers Working Less Than Six Months
(“Decree No. 3”).

Decree No. 3 stipulates, among other things, that the insurance
program for these short-term foreign workers shall consist of
guarantees for (a) work accidents, (b) health and (c) death. Also,
the insurance company managing the program must provide
participation data via a system connected and integrated with the
TKA Online system at the Directorate of Foreign Workers Utilization
Control of the MOM.

Decree No. 3 also requires the implementation of the insurance
program to be evaluated every six months or as necessary.

The Appendix of Decree No. 3 regulates the following minimum
contributions: (i) IDR 762,000 for a period of one month (30 days);
(ii) IDR 1,715,000 for a period of three months (90 days); and
(iii) IDR 2,477,000 for a period of six months (180 days). The
regulations are silent on whether the employer or the employee is
responsible for paying the contributions.

Maximum coverage is IDR 200 million for death and permanent
disability caused by a work accident, with an additional maximum of
IDR 25 million to return the body of the deceased to the country of

It remains to be seen whether the minimum contributions noted
above will be implemented by the insurance companies that offer
coverage for short-term workers in Indonesia.

For employers who have not yet applied for a Foreign Workers
Employment Plan (“RPTKA”), beginning
September 1, 2022, the RPTKA application will require employers to
submit an Electronic Policy Certificate from ASTAKA, an online
portal established to facilitate insurance programs for foreign
workers who work in Indonesia for less than six months.

And for employers with an existing RPTKA, Article 39 of GR 34
stipulates that if such employers fail to register their foreign
workers in an insurance program, they will be subject to
administrative sanction in the form of temporary suspension of the
RPTKA. The regulations are silent on the deadline for employers to
register their foreign workers in an insurance program.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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