Employment Law: Hiring expats, holidays and more

In principle, companies in Indonesia are allowed to employ foreign nationals with due consideration that there are no Indonesians with the necessary skills and/or knowledge for the position offered.

Companies employing foreign workers are required to appoint Indonesian nationals as understudy workers or trainees to work with the foreign employees for the purpose of training the Indonesians and transferring skills and knowledge. The education and training process for the Indonesian workers can take place in Indonesia or overseas and must be confirmed by a competency/training certificate.

These companies must also submit semester reports to the Ministry of Manpower and Transmigration (MOMT) outlining the following: a) information on currently employed foreign workers; and b) implementation of the mandatory education and training program for Indonesian trainees. The 1995 regulation did not require companies employing foreign workers to submit reports on the implementation of the mandatory education and training program.

National holidays and collective leave
The Minister of Religious Affairs, Minister of Manpower and Transmigration and Minister of State Apparatus Empowerment and Bureaucratic Reform have issued a joint decision on National Holidays and Collective Leave in 2015.

Joint Decision of the Minister of Religious Affairs No. 5 of 2014, Minister of Manpower and Transmigration No. 03/SKB/MEN/V/2014 and Minister of State Apparatus Empowerment and Bureaucratic Reform No. 02/SKB/M.PAN/V/2014 (Joint Decision) stipulates 14 public holidays in 2015.
The observation of holidays that fall on weekends is not moved to the nearest workday. However, the government may declare certain ‘bridge holidays’ (referred to as ‘collective leave’) to extend holidays that fall on the weekend. There are two collective leaves in 2015.

Collective leave is not mandatory. While government offices treat collective leave as mandatory and consequently reduce the annual leave entitlement of their employees, most offices in the private sector do not do the same. Indonesian manpower laws do not impose or recognize collective leave (i.e., forced leave) in the private sector but some companies encourage employees to take collective leave days. Note that taking such leave days must be voluntary.

Work and rest periods for upstream oil and gas workers
The MOMT recently issued Regulation No. 4 of 2014, which provides specific provisions on overtime, rest and break periods for employees of upstream oil and gas companies and oil and gas auxiliary service companies operating in Indonesia.
Overtime under this Regulation means working hours exceeding:
i. Seven hours in one day and 40 hours in one week for six working days; or
ii. Eight hours in one day and 40 hours in one week for five working days.
Employers in the upstream oil and gas industry may choose one of the work schedules in the table below based on their operational needs: