Medan

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Employment Regulations

Sections

Employment Regulations in Medan, Indonesia

1. Work Permits

  • Types of Work Permits:
    • Limited Stay Visa (KITAS): For expatriates working in Indonesia.
    • Work Permit (IMTA): Required for foreign workers.
  • Application Process:
    • Employer must apply for a work permit on behalf of the foreign employee.
    • Required documents include a valid passport, a letter of appointment, and a company registration certificate.
  • Costs:
    • Work permit fees vary but can range from IDR 5 million to IDR 10 million (approximately USD 350 to USD 700) depending on the type and duration.

2. Labor Laws

  • Governing Laws:
    • Law No. 13 of 2003 on Manpower.
    • Law No. 11 of 2020 on Job Creation.
  • Key Provisions:
    • Protection against discrimination.
    • Regulations on termination of employment.
    • Rights to join labor unions.

3. Minimum Wage

  • Current Minimum Wage:
    • As of 2023, the minimum wage in Medan is approximately IDR 3.1 million per month (around USD 210).
  • Adjustments:
    • Minimum wage is reviewed annually and may vary by region.

4. Working Hours

  • Standard Working Hours:
    • 40 hours per week, typically 8 hours per day.
    • Overtime is compensated at 1.5 times the regular hourly rate.
  • Rest Days:
    • Employees are entitled to at least one day off per week.

5. Employee Rights

  • Rights Include:
    • Right to fair wages and timely payment.
    • Right to safe working conditions.
    • Right to maternity leave (3 months) and paternity leave (2 weeks).
    • Right to health insurance and social security.

6. Costs Involved

  • Employment Costs:
    • Employers must contribute to social security (BPJS Ketenagakerjaan) and health insurance (BPJS Kesehatan).
    • Costs for work permits and visas as mentioned above.

7. Application Procedures

  • For Foreign Workers:
    • Employer submits a request for a work permit to the Ministry of Manpower.
    • After approval, apply for a KITAS at the immigration office.
  • Timeline:
    • The process can take 1-3 months.

8. Local Considerations

  • Cultural Aspects:
    • Respect for hierarchy and seniority is important in the workplace.
    • Building personal relationships is often crucial for business success.
  • Language:
    • Bahasa Indonesia is the official language; proficiency can enhance workplace communication.

9. Additional Resources

  • Local Government Offices:
    • Ministry of Manpower and Transmigration in Medan for labor-related inquiries.
  • Legal Assistance:
    • Consider consulting with a local legal expert for compliance with labor laws.

This structured overview provides essential information for navigating employment regulations in Medan, Indonesia.