12 May 2014

As mandated by Law No. 24 of 2011 concerning Social Security Organizing Agency (Badan Penyelenggara Jaminan Sosial or “BPJS”) (“Law No. 24/2011”), on 1 January 2014 PT Askes (Persero) effectively became BPJS Health and PT JAMSOSTEK (Persero) became BPJS Manpower. However, the implementing regulations of Law No. 24/2011 have not, to date, been issued.


Here are highlights of the provisions regarding Indonesian Social Security:


• As of 1 January 2014, Indonesian social security programs will be managed by BPJS Manpower and BPJS Health.


• As of 1 January 2014, health security programs which were previously managed by PT JAMSOSTEK (Persero) will be managed by BPJS Health; whereas BPJS Manpower will manage employees’ social security programs for (i) work accidents, (ii) old age, (iii) retirement, and (iv) death.


• Every Indonesian citizen and foreign citizen who has resided and worked in Indonesia for more than 6 (six) months is required to participate in the social security program appropriate for him/her. Employers are required to register themselves and their employees as participants of the program appropriate for them. Employees whose employer fails to do so are entitled to register themselves to BPJS at the employer’s expense. The registration application which is accompanied by the supporting documents is to be submitted to the branch office of BPJS Manpower at the domicile of the company.


• Sanctions for a company/employer’s non compliance with the above registration comprise: (i) written warnings, (ii) fines, and/or (iii) rejection of their application for business or operational permits and other licenses.


• Employers are under obligation to collect contribution payment for the program from their employees and forward the payment to BPJS. The sanction for non compliance of the foregoing obligation comprise maximum imprisonment of 8 (eight) years or a maximum fine of Rp. 1,000,000,000 (one billion Rupiah).


Currently BPJS Manpower uses the same system of information, database, and services as that of PT JAMSOSTEK (Persero). (by: Indra Setiawan & Tara Riandika)