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COVID-19 Wreaking Havoc on Indonesia’s Employment Sector

Updated: Aug 31

by Clara Viriya (clara.viriya@launcher.id) and Rafif Rizqullah (rafif.rizqullah@launcher.id)

Since New Year’s Eve, the world has lived through more than 100 days of Coronavirus or officially known as COVID-19. There have been over 1.6m confirmed cases, and over 97,000 deaths. Billions of people are confined to their homes and stock markets have plummeted. This also affects Indonesia’s employment sector in particular, since to date, there have been 1.2m laid off employees from approximately 74.000 companies both formal and informal sectors.

As the specific authority supervising employments in Indonesia, Ministry of Manpower of Republic of Indonesia (“MOM”), has responded to Covid-19 pandemic by issuing Circular of the MOM No. M/3/HK.04/III/2020 on Worker/ Labor Protection and Business Continuity in the Context of Preventing and Countering Covid-19 on 17 March 2020 ("CL MOM COVID-19"). This aims to protect worker, employee, labor both in formal or informal sectors, as well as to assuring the continuity of Indonesian businesses. MOM has requested the Governors / Regents / Mayors from each of the provinces to prevent the spread and handling of cases related to Covid-19 in the work environment. It also implements wage protection for worker/ labor in connection with the Covid-19 pandemic. Please find below the summary of the newly issued regulation.

Efforts to Prevent the Spread and Handling of Cases related to COVID-19 in the Workplace

  • Business Owner is requested to collect the data and report to the relevant authority each case or the allegedly Covid 19 cases in the workplace.

  • Business Owner is requested to take preventive/ anticipatory measures to spread Covid-19 such as the Safety and Health (Keselamatan dan Kesehatan Kerja - K3) program, empowerment of the Committee for Safety and Health Program (Panitia Pembina Keselamatan dan Kesehatan Kerja - P2K3), and optimization of work health services.

  • · Business Owner is requested to immediately set a preparedness plan in the facto encounter the Covid-19 pandemic which aims to reduce the risk of transmission at work and maintain business continuity.

Wage Protection for Workers / Laborers related to the COVID-19

  • Workers/ laborers who are categorized as Monitored Persons (Orang Dalam Pengawasan - ODP) according to the doctor's statement, hence they are not allowed to work for a maximum of 14 days or determined by the Ministry of Health's standards, then the wages are must still be paid in full.

  • Workers/ laborers who are categorized as Suspect Cases and quarantined/ isolated according to the doctor's statement, then the wages are must still be paid in full during the quarantine/ isolation period.

  • Workers/ laborers who do not come to work due to illness of Covid-19, evidenced by a doctor's statement, then the wages are must still be paid according to statutory regulations.

  • For companies that restrict business activities due to local government policies such as Jakarta, Bogor and Bandung, for the prevention and control of Covid-19, so that some or all of their workers/ laborers do not come to work, taking into account the business continuity, then changes in the amount and manner of payment of wages are made according to the agreement between the employer and worker/ labor.

In addition to the above, based on Law No. 13 of 2003 on Manpower, there are also some manpower obligations that must be fulfilled in connection with the termination of employees as stated in the above circumstances. Such as determination of severance pay, service pay as well as compensation for permanent and contractual employees in case of termination.

To date, the central government has coordinated with relevant officials in all provinces of Indonesia to anticipate and overcome manpower problems in the regions. Among them by giving direction and guidance both verbally through a remote dialogue (teleconference) or through circulars and coordination related to the data collection and monitoring of companies that terminate workers / laborers or do layoffs. Government also creates several assistancy programs such as Labor Intensive Infrastructure Program (Padat Karya Infrastruktur), Labor Intensive Productive Program (Padat Karya Produktif) and Independent Labor Program (Tenaga Kerja Mandiri) as well as the acceleration of Pre Work Card (Kartu Pra Kerja).

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