Obligation of local and foreign companies (PMA) to register BPJS for their employees

The Social Security Administering Body (BPJS) is a social security program issued by the government, to provide health protection for all Indonesian people. As stated in Article 1 Number 1 of Law Number 24 of 2011 concerning Social Security Administration Bodies (UU BPJS). According to Article 1 Number 4 of the BPJS Law regarding who is a BPJS participant, it reads "Participants are everyone, including foreigners. Those who have worked for a minimum of 6 (six) months in Indonesia, who have paid their dues." Based on this law, BPJS Employment is mandatory for all foreign workers (TKA) and local workers who work in Indonesia.

This also applies to companies, both local and foreign companies (PMA). Companies must provide social security in the form of BPJS cards, to protect their employees.

There are two types of BPJS offered by the Indonesian government, namely :

BPJS Health

BPJS Health is social security which has the task of providing health insurance for all Indonesian people. BPJS Health has the function of providing National Health Insurance.

BPJS of Employment

Quoted from Kontan, BPJS Employment is a social security program that provides protection for Indonesian workers. The functions of BPJS Employment are :

1. Accident insurance

2. Pension plan

3. Pension Guarantee

4. Life insurance

Why Should PMA Companies Register with BPJS?

1. Legal Requirements: One of the main reasons for PMA companies to register with BPJS is because it is mandated by Indonesian law. The Law on Social Security (UU No. 24 of 2011) requires all employers, including foreign and local PMA companies, to provide health insurance for their workers through BPJS Health (Health) and BPJS Employment (Employment).

2. Employee Welfare: Registering with BPJS ensures that PMA company employees receive comprehensive health coverage. This includes access to hospitals, clinics, and other medical facilities across the country. This gives employees peace of mind, knowing that they are covered in the event of illness or accident.

3. Social Responsibility: Being a responsible corporate citizen is very important for the reputation and sustainability of PMA companies in Indonesia. Registering with BPJS is one way these companies demonstrate their commitment to the welfare of their employees and local communities.

4. Compliance and Avoiding Penalties: Failure to comply with BPJS registration can result in significant penalties and legal consequences. PMA companies that do not register may be subject to fines, restrictions, or even revocation of their business permits. Therefore, it is in the best interests of these companies to fulfil their BPJS obligations.

The obligation of both local and foreign companies (PMA) to register BPJS for their employees.

The provisions on companies being obliged to register BPJS for their employees have been clarified in the BPJS Law Article 15 Paragraph 1 which reads "Employers are gradually obliged to register themselves and their workers as participants in BPJS (Health or Employment), in accordance with the social security program they are participating in."

In this way, every local company and PMA is required to register BPJS Health and Employment membership for all its employees without exception.

Sanctions if local or foreign companies (PMA) do not register BPJS for their employees.

Based on BPJS Law Article 9 :

Sanctions for not receiving public services are given to employers other than state administrators :

1. Business related licensing

2. Permits required to participate in project tenders

3. Permission to employ foreign workers

4. Permit of the company providing worker/labour services

5. Building construction permit (IMB)

Sanctions for not receiving public services are given to anyone other than the Employer, PBI who meets the requirements :

1. Building construction permit (IMB)

2. Driving licence (SIM)

3. Land certificate

4. Parport or

5. Vehicle registration certificate (STNK)

Administrative sanctions that will be received by local and foreign companies (PMA) that do not register BPJS for their employees, namely :

1. Written warning from BPJS

2. Fines by BPJS

3. Closed access to various public services related to the company. This sanction was imposed by the government based on a request from BPJS. These sanctions are in the form of :

a. Difficulty obtaining a business permit

b. Prohibition on employing foreign workers (TKA)

c. Prohibition from participating in projects/tenders

d. Revocation of IMB

Registration Process

To register for BPJS, both foreign (PMA) and local companies must follow an easy process :

1. Obtain a BPJS Registration Number: Companies need to obtain a unique BPJS registration number by submitting an application via the BPJS website or visiting the BPJS office.

2. Determining Applicable Programs: Companies must decide which BPJS programs apply to their employees. These programs include health insurance, work accident insurance, old age insurance, and pension programs

3. Worker Registration: Employers are responsible for registering their workers in the selected BPJS program. This involves collecting necessary employee information and making monthly contributions.

4. Monthly Contributions: Employers are required to provide monthly contributions to BPJS based on a predetermined percentage of each worker's salary. These contributions are usually split between the employer and employee.