Regulations on Overtime for Foreign Workers in Mining Companies

PERTANYAAN

1. Can a foreign worker become a Project Manager in a company in Indonesia?
2. With the existence of a 12-2 roster in the mining industry (12 working days and 2 days off), should the 8th to 12th day be paid overtime (the 7th day is paid overtime, but days 8-12 are only paid regular days)? Then, can this 12-2 roster be associated with the 6-1 roster (as if replacing off and or just multiplied by 2, 6x2=12 (working days) and 1x2=2 (day off) so that overtime payments for days 8-12 are not applied?
3. How do you calculate overtime hours? What are the regulations on overtime for foreign workers? What are the sanctions for companies if they do not pay overtime wages?

INTISARI JAWABAN

Basically, overtime is working time that exceeds 7 hours a day and 40 hours a week for 6 working days or 8 hours a day and 40 hours a week for 5 working days. Then, employers who do not pay overtime wages are subject to criminal sanctions of imprisonment for a minimum of 1 month and a maximum of 12 months and/or a fine of at least IDR 10 million and a maximum of IDR 100 million.

So, what is the legal basis? Are there any specific provisions governing overtime for foreign workers in Indonesia?

Please read the review below for a further explanation.

ULASAN LENGKAP

This article is an English translation of Ketentuan Lembur Tenaga Kerja Asing di Perusahaan Pertambangan written by Renata Christha Auli, S.H., and published on Monday, 3 July 2023.

This article is an update of the article entitled Overtime for Foreign Workers, written by Alfin Sulaiman, S.H., M.H. from Arkananta Vennootschap, and published on Monday, 27 July 2015.

All legal information available on Klinik hukumonline.com has been prepared for educational purposes only and is general in nature (read the complete Disclaimer). In order to obtain legal advice specific to your case, please consult with Justika Partner Consultant.

With regards to the company you mentioned in your question, we assume that it is a mining company. Furthermore, regarding the roster in the mining industry, we assume that the roster is applied to mining companies engaged in the general mining sector.

Provisions for Foreign Workers as Project Managers

In the Appendix to Decree of the Minister of Manpower 61/1983, the manager position is categorized in the leadership organizational unit, which is regulated by restrictions with three categorizations, namely closed, permitted for a certain time, and temporarily open (p. 1). The position of manager is explained in the following details:[1]

1. General Manager/President Director, temporarily open;
2. Vice President, closed for Foreign Workers (in Bahasa Indonesia is known as Tenaga Kerja Asing/"TKA") and temporarily open when General Manager/President Director is held by an Indonesian Citizen (Warga Negara Indonesia/"WNI");
3. Representative, closed for foreign workers;
4. Manager Production & Technical Affairs, permitted for a certain time (60 months);
5. Manager of Exploration & Mining, permitted for a certain period (60 months);
6. Administrator Manager, closed for foreign workers;
7. Financial Manager/Controller, permitted for a certain period (60 months);
8. Personnel Manager, closed for foreign workers;
9. Resident Manager, closed for foreign workers;
10. Manager of Operation, permitted for a certain period (60 months);

You can read more about manager positions in the Appendix to Decree of the Minister of Manpower 61/1983 (pp. 1 to 3).

Since you did not mention the specific duties and responsibilities of the project manager, we assume that the project manager in question is the Manager Production & Technical Affairs or Manager of Exploration & Mining or Manager of Operation. So, to answer your first question, we are of the view that foreign workers can become project managers with a time limit of 60 months.

Provisions for Calculation of Overtime in the Mining Industry

Regarding working time provisions, companies in the general mining sector including supporting service companies that carry out activities in certain operating areas and can apply:

1. Working and break time as stipulated in Decree of the Minister of Manpower 234/2003[2]

Based on Article 2 section (1) Decree of the Minister of Manpower 234/2003, companies in the field of Energy and Mineral Resources including supporting service companies conducting activities in certain operating areas can choose and determine one and or several working hours in accordance with the company's operational needs as follows:

1. 7 hours per day and 40 hours per week for a 6-day work week;
2. 8 hours per day and 40 hours per week for a 5-day work week;
3. 9 hours 1 day and a maximum of 45 hours in 5 working days for one working period;
4. 10 hours 1 day and maximum 50 hours in 5 working days for one working period;
5. 11 hours 1 day and a maximum of 55 hours in 5 working days for one working period;
6. 9 hours 1 day and a maximum of 63 hours in 7 working days for one work period;
7. 10 hours 1 day and maximum 70 hours in 7 working days for one working period;
8. 11 hours 1 day and maximum 77 hours in 7 working days for one working period;
9. 9 hours 1 day and a maximum of 90 hours in 10 working days for one work period;
10. 10 hours 1 day and a maximum of 100 hours within 10 working days for one work period;
11. 11 hours 1 day and a maximum of 110 hours in 10 working days for one work period;
12. 9 hours 1 day and a maximum of 126 hours in 14 working days for one work period;
13. 10 hours 1 day and a maximum of 140 hours in 14 working days for one work period;
14. 11 hours 1 day and a maximum of 154 hours in 14 working days for one working period;

Working time as referred to in Article 2 section (1) letter a to n Decree of the Minister of Manpower 234/2003 does not include break time of at least 1 hour.[3] Then, working time as referred to in Article 2 section (1) letter c to n Decree of the Minister of Manpower 234/2003, includes permanent (constant) overtime as an excess of 7 hours 1 day.[4]

Furthermore, Article 5 section (1) Decree of the Minister of Manpower 234/2003 stipulates that companies that use working time as referred to in Article 2 section (1) letter a and b Decree of the Minister of Manpower 234/2003, must provide break time as follows:

1. after workers/laborers have worked continuously for 6 days in 1 week or 7 hours in 1 day and 40 hours in 1 week, workers/laborers must be given 1 day of break.
2. after workers/laborers have worked continuously for 5 days in 1 week or 8 hours in 1 day and 40 hours in 1 week, the workers/laborers shall be given 2 days of break.

As for overtime wages, these are wages that must be paid to workers/laborers who perform work for more than 7 hours a day and 40 hours a week for 6 working days or 8 hours a day and 40 hours a week for 5 working days.[5]

2. The maximum working period is 10 consecutive weeks of work, with 2 consecutive weeks of break, and every 2 weeks in the working period is given 1 day of break[6]

Companies that use this working time must pay wages after 7 hours of work with the following calculation:[7]

1. for 9 hours of work per day, shall pay overtime wages for each working day at the rate of 3 ½ x the hourly wage;
2. for a working time of 10 hours per day, it is mandatory to pay overtime wages for each working day at the rate of 5 ½ x the hourly wage;
3. for 11 hours of work per day, overtime shall be paid on each working day at the rate of 7 ½ times the hourly rate;
4. for working time of 12 hours per day, overtime work shall be paid for each working day at the rate of 9 ½ times the hourly wage.

Furthermore, we need to emphasize that the implementation of break periods is regulated in Work Agreements, Company Regulations, or Collective Labor Agreements in accordance with the needs of the company, as stipulated in Article 3 Decree of the Minister of Manpower 234/2003.

Answering your second question, according to our opinion, the 12-2 and 6-1 roster system that is implemented refers to the provisions of the Decree of the Minister of Manpower 234/2003. Based on Article 2 section (1) letter a to n of Decree of the Minister of Manpower 234/2003, we do not see any regulation regarding 12-2 roster (12 working days and 2 off days). However, the provision of 6-1 roster (six working days and 1 off day) can be seen in Article 2 section (1) letter a jo. Article 5 section (1) letter a Decree of the Minister of Manpower 234/2003.

Furthermore, overtime is regulated in Article 1 number 2 of Decree of the Minister of Manpower 234/2003, namely, overtime is working time that exceeds 7 hours per day and 40 hours per week for 6 working days or 8 hours per day and 40 hours per week for 5 working days. Based on this explanation, for the roster system applied by the company, employers are obliged to pay overtime work wages to workers if the working time of the system exceeds the stipulated provisions.

Sanctions for Employers Who Do Not Pay Overtime Wages

Answering your third question, as far as we can see, there is no provision that specifically regulates overtime for foreign workers, so in general, foreign workers working in Indonesia are still subject to the Perppu 2/2022 (Job Creation) that has been enacted into law, and the Manpower Law.

Also read: Overtime Work Limit

The sanctions for employers who do not pay overtime wages are subject to criminal sanctions of imprisonment for a minimum of 1 month and a maximum of 12 months and/or a fine of at least IDR 10 million and a maximum of IDR 100 million.[8]

For information, criminal sanctions do not eliminate the obligation of employers to pay the rights and/or compensation of workers/laborers.[9] Therefore, if your overtime wages are not paid, the first action you can take is bipartite negotiations between you and your employer.[10] You can read more about the dispute settlement mechanism between employers and workers in the article 3 Mechanisms of Industrial Relations Dispute Settlements.

These are the answers we can provide, we hope you will find them useful.

Legal Basis:

1. Law Number 13 of 2003 on Manpower;
2. Law Number 2 of 2004 on Industrial Relations Dispute Settlements;
3. Regulation of the Government in Lieu of Law Number 2 of 2022 on Job Creation which has been enacted into law under Law Number 6 of 2023;
4. Regulation of the Minister of Manpower and Transmigration Number PER.15/MEN/VII/2005 of 2005 on Working and Break Time in the General Mining Business Sector in Certain Operating Areas;
5. Decree of the Minister of Manpower and Transmigration Number KEP-61/MEN/83 of 1983 on the Implementation of Restrictions on the Use of Foreign Workers in the Mining and Energy Sector, General Mining Sub-Sector;
6. Decree of the Minister of Manpower and Transmigration Number KEP-234/MEN/2003 of 2003 on Working and Break Time in the Energy and Mineral Resources Business Sector in Certain Areas.

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[1] Appendix to Decree of the Minister of Manpower and Transmigration Number KEP-61/MEN/83 of 1983 on the Implementation of Restrictions on the Use of Foreign Workers in the Mining and Energy Sector, General Mining Sub-Sector.

[2] Article 2 section (1) letter a Regulation of the Minister of Manpower and Transmigration Number PER.15/MEN/VII/2005 of 2005 on Working and Break Time in the General Mining Business Sector in Certain Operating Areas (“Regulations of the Minister of Manpower 15/2005”).

[3] Article 2 section (2) Decree of the Minister of Manpower and Transmigration Number KEP-234/MEN/2003 of 2003 on Working and Break Time in the Energy and Mineral Resources Business Sector in Certain Areas (“Decree of the Minister of Manpower 234/2003”).

[4] Article 2 section (3) Decree of the Minister of Manpower 234/2003.

[5] Article 1 number 3 Decree of the Minister of Manpower 234/2003.

[6] Article 2 section (1) letter b Regulations of the Minister of Manpower 15/2005.

[7] Article 2 section (3) Regulations of the Minister of Manpower 15/2005.

[8] Article 81 number 68 Regulation of the Government in Lieu of Law Number 2 of 2022 on Job Creation (“Perppu 2/2022”) as amended Article 187 section (1) Law Number 13 of 2003 on Manpower (“Manpower Law”).

[9] Article 189 Manpower Law.

[10] Article 3 section (1) Law Number 2 of 2004 on Industrial Relations Dispute Settlements.