Brief Analysis Regarding the Employment of Foreign Workers in Indonesia Based on Law

Number 11 of 2020 on Job Creation and Government Regulation Number 34 of 2021on the
Utilization of Foreign Workers
By: Azzahra Saffanisa Sudiardiputri

Law Number 11 of 2020 on Job Creation (“Job Creation Law”) which was issued in October
2020 was made to increase Indonesia’s competitiveness and create more job opportunities amid
the rising competitive economy and globalization. The Job Creation Law has made a significant
impact on various legal sectors, one of which is the employment of foreign workers in Indonesia.
The basic philosophy of using foreign workers is needed to increase investment, exports, transfer
of technology, and transfer of expertise to Indonesian Migrant Workers (TKI), as well as to expand
job opportunities. In regulating foreign workers, The Job Creation Law has changed several points
in Law Number 13 of 2003 on Manpower (“Manpower Law”) and as the implement regulation
of the Job Creation Law, the government has issued the Government Regulation Number 34 of
2021 on the Utilization of Foreign Workers (“GR 34/2021”). The GR 34/2021 repeals Presidential
Regulation No. 20 of 2018.

The Job Creation Law changed and added several provisions in the Manpower Law. Under the
new regulation in the Job Creation Law, it is sufficient for employers to have a Foreign Worker
Employment Plan (“RPTKA”) which is endorsed by the central government.1 It revokes the
previous regulation in the Manpower Law which stipulated the granting of permits to employ
foreign workers as specified in the Permit to Employ Manpower (IMTA). But the provision
regarding RPTKA does not apply for:
- Directors or commissioners with certain share ownership or shareholders following the
provisions of laws and regulations;
- Diplomatic and consular officers at representative offices of foreign countries; or
- Foreign workers are required by employers in the types of production activities that are
stopped due to emergencies, vocational, technology-based start-ups, business visits, and
research for a certain period.

1
Indonesia, Law on Job Creation, Law Number 11 of 2020, Article 81 Number 4.
The Job Creation Law through the GR 34/2021 regulates that employers of foreign workers can
also employ the foreign workers who are currently being employed by other Employers in the
same position as the board of directors or commissioners or foreign workers in the vocational
education and vocational training sector, the digital economy sector, and the oil and gas sector for
contractor of a partnership contract. It can be applied only if the foreign workers obtain approval
from the first employer and the period of employment is not later as stated in the Legalization of
the RPTKA from the first Employer of foreign workers. Furthermore, this law regulates that
foreign workers can be employed in Indonesia only in a working relationship for a certain position
and a certain time and have competence in accordance with the position to be occupied and
prohibited to work in charge of personnel affairs.2 The certain positions that can be occupied by
the foreign workers are determined by the Minister after receiving input from the relevant
ministries/institutions.3 This law stipulates more specifically that foreign workers must have
special competencies to have a work permit in Indonesia which was not regulated in the previous
law. Moreover, this Job Creation Law also regulates the employers to repatriate the foreign
workers to their own countries after the employment contract ends, which was not previously
regulated in the Manpower Law.4

In conclusion, with this regulation, the government has eased the hiring of foreign workers in
Indonesia. However, the government continues to pay attention to the absorption of domestic
workers by obligating the domestic workers to have transfer technology and transfer skills with
the foreign workers.

2
Ibid.
3
Indonesia, Government Regulation on the Utilization of Foreign Workers, Government Regulation
Number 34 of 2021, Article 4 Paragraph (2).
4
Indonesia, Law on Job Creation, Law Number 11 of 2020, Article 81 Number 7.