Indonesia relaxes certain regulations on contributions for BPJS Manpower’s social security programs during the Covid-19 pandemic

29 September 2020

The Manpower social security program (or known as "BPJS Manpower") is a safety net program to protect all wage-receiving and non-wage-receiving participating workers in Indonesia. BPJS Manpower consists of four social security programs: occupational accident security, worker’s death security, old age security and pension security.

To support these programs, the Indonesian Government requires employers to make certain contributions to the BPJS Manpower programs based on certain percentages of each employee’s monthly salary. The regulations require contributions to be borne wholly by the employer in the case of occupational accident security and worker’s death security, and, in the case of old age security and pension security, part of the contributions is to be borne by the employee as well.

To protect employees and ensure business continuity amid the Covid-19 pandemic, the Indonesian Government issued Government Regulation No.49 of 2020 on Adjustments to the Manpower Social Security Program Contribution During the Non-Natural Disaster of the Spread of the Corona Virus Disease 2019 (COVID-19) ("GR 49/2020") on 31 August 2020 (effective as of 1 September 2020).

GR 49/2020 relaxes some of the Government’s current regulations governing the BPJS Manpower programs by providing the following facilities: (i) leniency of payment contribution deadlines for all of the above BPJS Manpower programs; (ii) reduction of the payment contributions for occupational accident security and workers’ death security; and (iii) conditional partial payment contribution for the pension security program, with a deferral of the employer’s obligation to pay the balance.

The facilities have been available since 1 September 2020 and will apply until January 2021.

This is an extract of an article by Soemadipradja & Taher, an Indonesian law firm with which Allen & Gledhill has a strategic alliance. To read the full article from the Soemadipradja & Taher website www.soemath.com, please click here.