COVID-19 Pandemic: Indonesian Government to Relax the Payment of Manpower Social Security Premium

On 31 August 2020, the Indonesian Government has issued a new provision that provides deduction and postponement in the mandatory payments of Manpower Social Security Organization/Badan Penyelenggara Jaminan Sosial Ketenagakerjaan (“BPJSTK”) premium. We note that this new regulation aims to provide sufficient protection to the workers as well as its employers in effort to maintain the business continuity amidst the challenging period of COVID-19 pandemic.

Legal Frameworks: Our below executive summary refers to the Government Regulation No. 49 of 2020 on the Adjustment of the Manpower Social Security Program Premium During the Non-Natural Disaster of Coronavirus Disease 2019 (“COVID19”) (“GR 49/2020”).

Main Keys on the Relaxation on the Payment of BPJSTK Premium: We have managed to provide you the following main keys regarding the relaxation on the payment of BPJSTK premium.

Relaxation on the Payment of BPJSTK Premium: In brief, we note that the Indonesian government imposes the following relaxation on the payment of BPJSTK premium:

 

  1. Deadline extension for the payment of BPJSTK monthly contribution; 
  2. Imposing 99% deductions to the Work Accident Security/Jaminan Kecelakaan Kerja (“JKK”) and Death Security/Jaminan Kematian (“JM”) premium; and
  3. Partial postponement of Pension Security/Jaminan Pensiun (“JP”).

Deadline Extension for the Payment of BPJSTK Premium: We note that the government has extended the deadline of BPJKST premium payment from the 15th to the 30th of each month. However, provided that the 30th falls on a national holiday, then the payments must be made on a working day before the 30th (Art. 4 (1) jo. (2) of GR 49/2020).

Deductions in the JKK and JM Premium: We note that the government imposes 99% deductions to JKK and JM premium. In this instance, the employer only requires paying the remaining 1% of their regular rate (Art. 5 jo. Art. 9 of GR 49/2020).

On the related note, please be advised that to be qualified on the deductions, employers will need to have fulfilled their regular payments to the JKK and JKM programs until July 2020. The new participants who registered to the JKK and JKM after July 2020 will need to pay in normal rates for the next two months, and the deduction rate will apply in their third month (Art. 13 (1) and (2) of GR 49/2020).

Partial Postponement on JP: We note that the employers can postpone 99% of the JP monthly contribution to be paid on 15 May 2021 until 15 April 2022. However, the remaining 1% must be paid each month as usual (Art. 17 (2) of GR 49/2020).

On the related note, employers must have fulfilled the following prerequisite to enjoying the JP partial postponement:

  1. Medium and large-sized enterprises must: (a) have fulfilled BPJSTK regular payment until July 2020; and (b) obtain approval from BPJSTK organization by submitting its financial statements that show 30% decrease in sales/profits starting from February 2020 (Art. 18 jo. Art 19 (1) of GR 49/2020)
  2. Micro and small-sized enterprises do not have to obtain approval from the BPJS organization but must have completed its regular payments until July 2020 (Art. 20 of GR 49/2020).

The article above was prepared by Marshall S. Situmorang (Partner) and Aniendita Rahmawati (Associate). 

Disclaimer: The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances. For more information, please contact us at mail@nusantaralegal.com.