25
Aug2021

Introducing the Job Loss Security Program for Employee Affected Termination of Employment

The National Social Security System is established in order to provide social protection which is a mandate from Article 28H (3) jo. Article 34 (2) The 1945 Constitution of the Republic Indonesia (“the Constitution 1945”), the United Nation Declaration on Human Rights in 1984, and ILO Convention No 102 of 1952.

The establishment of a National Social Security System is expected to meet the basic needs of a decent life for all people in the event of things that can result in loss or decrease in income, due to illness, accident, job loss, entering old age, or retirement.

The social security organizing agency is regulated under the provisions of Law No. 24 of 2011 concerning Social Security Organizing Agency (“BPJS Law”). Referring to the provisions of Article 5 paragraph (2) of the BPJS Law, BPJS is divided into 2 (two), namely BPJS for Health and BPJS for Manpower.

No. Name Scope of Program
1. BPJS for Health Health security (“JKN”)
2. BPJS for Manpower Work accident security (“JHT”);

Old day security (“JHT”);

Pension security (“JP”); and

Death security (“JKM”).

 

However, in 2020, the Government made various changes and additions to the provisions of the law to encourage the improvement of economic flows in Indonesia, this is marked by the enactment of Law No. 11 of 2020 on Job Creation Law (“Job Creation Law”). In 2021, there are at least 49 (forty-nine) provisions of the implementing regulations of the Job Creation Law, one of which is Government Regulation Number. 37 of 2021 concerning the Implementation of Job Loss Security Program (“GR 37/2021”).

 

The Employment Security Program Post Job Creation Law

No. Name Scope of Program
1. BPJS for Health Health security (“JKN”)
2. BPJS for Manpower Work accident security (“JHT”);

Old day security (“JHT”);

Pension security (“JP”);

Death security (“JKM”); and

Job loss security (“JKP”).

 

The important points that businessman need to be aware due the enactment of GR 37/2021 will be further elaborated as follows:

 

Job Loss Security Program in General

Job Loss Security Program (“JKP”) is a social security provided to employee who experience termination of employment (“termination”), the benefit of this JKP include cash, access to market information, and job training.

JKP is included in the program organized by BPJS for Manpower and the Central Government.

JKP benefits are provided to Participants who experienced termination for both employees under fixed-term work agreement (“PKWT”) and employees under indefinite time work agreement (“PKWTT”). JKP benefit for PKWT are proved if the termination is carried out before the end of the PKWT period.

JKP benefit can be submitted after the Participant has a period of at least 12 (twelve) months in 24 (twenty-four) months and has paid premium for at least 6 (six) consecutive months before termination occur.

JK benefits are excluded if termination is carried out on the grounds of:

  1. Resign;
  2. Permanent total disability;
  3. Retirement; or
  4. Deceased

The right to JKP benefits is lost if employee has fulfill these requirement:

  1. Do not apply for JKP benefit claims for 3 (three) months since the termination;
  2. Have obtained a job; or
  3. Deceased

 

Employer Obligation to Enroll Employee in JKP Program

Through the provision of Article 2 (1) GR 37/2021, employers are required to enroll their employees as participants in the JKP Program.

 

The Requirement to be a Participant in JKP Program

The requirements to be a participant in the JKP Program are stipulated in the provision of Article 4 (2) GR 37/2021, which regulates as follows:

  1. Indonesian citizen;
  2. Have not reach the age of 54 (fifty-four) years at the time of registration; and
  3. Have a working relation.

Furthermore, Article 4 paragraph (3) GR 37/2021 regulates the requirements referred to in paragraph (2) must also meet the provisions:

  1. a) Employee who work in large businesses, are included in the JKN, JKK, JHT, JP, and JKM programs;
  2. b) Employee who work in micro businesses and small businesses, included at least in the JKN, JKK, JHT, and JKM Programs.

 

The JKP Program Registration Procedure

1) For employee who have been included by employers in the social security program immediately become participants JKP starting from the date GR 37/2021 enacted.

2) For new employee, employers are required to register them in the JKP program by submitting a registration form no later than 30 (thirty) days from the date the concerned employee starts working.

3) BPJS for Manpower is obliged to provide a membership number maximum 1 (one) day since the registration form is received completely and correctly and the first premium have been paid in full.

4) Employers are given a certificate of membership of JKP Program by BPJS for Manpower.

5) Employee are given proof of participation of JKP Program by BPJS for Manpower which is integrated in 1 (one) social security program membership card.

 

Premium and Funding Sources JKP Program

JKP Program must be paid monthly amounting to 0.46% of the month wages. The contribution of 0/46% is derived from premium paid by the Central Government and the JKP funding sources.

The Central Government contributes 0.22% of a month’s wages. Meanwhile, the JKP funding sources is a re-composition of JKK and JKM program contributions.

 

Sanction

Employers who failed to comply to the provision of Article (2) paragraph (1) GR 37/2021 concerning the obligation to register their employee in JKP Program may be subject to administrative sanctions not getting certain public services.

 

 

DISCLAIMER:

Any information contained in this Article is provided for informational purposes only and should not be construed as legal advice on any subject matter.  You should not act or refrain from acting on the basis of any content included in this Legal Update without seeking legal or other professional advice.  This document is copyright protected. No part of this document may be disclosed, distributed, reproduced or transmitted in any form or by any means, including photocopying and recording or stored in retrieval system of any nature without the prior written consent of SIP Law Firm.

 

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