The contents of the Omnibus Law on Employment Creation
The Job Creation Act consists of 11 discussion clusters with several points in them, including:
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Simplification of business licensing
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Investment requirements
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Employment
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Convenience and protection of MSMEs
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Ease of doing business
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Research and innovation support
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Government administration
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Imposition of sanctions
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The land acquisition
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Government investment and projects
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Economic area
Of the eleven clusters mentioned above, of course there are hundreds of articles in the Omnibus Law on Cipta Kerja.
However, Talenta by Mekari will only describe a number of articles that are directly related to manpower, which is the concern of many circles.
Illustration of the Omnibus Law on Job Creation
Points of the Job Creation Omnibus Law
When juxtaposed with its predecessor law, the Job Creation Law has several differences related to employment policies.
There have been changes and deletions to several articles in Law 13/2003.
Following are the points of change in the Omnibus Law on Job Creation compared to the Manpower Law 13/2003:
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a. Hours of Work / Holidays
The points regarding working hours or holidays in this new law are:
- Hours of Work
Overtime is 4 hours per day and 18 hours per week.
In the previous law, it was stated that the maximum overtime work was only 3 hours per day and 14 hours per week.
- Long breaks
There is no obligation for the company to provide long breaks.
So, the right to take 2 months of long leave for workers / laborers who have worked for 6 years continuously, which was in effect in the previous law, is delegated as the authority of the company.
- Menstrual leave
There is no mention of menstrual leave for women on the first and second days.
It is not yet certain whether the articles related to menstrual leave have been changed or removed
Article 81 of Law 13/2003 stipulates that female workers / laborers can get a day off during their first menstruation and second period during menstruation.
Illustration of vacation leave in the Omnibus Law on Job Creation. Illustration of vacation leave in the Omnibus Law on Employment Creation
- Maternity Leave
Nothing stated regarding maternity and maternity leave.
It is not yet certain whether the articles related to maternity leave were changed or removed.
In the previous Law Article 82, a mechanism for maternity leave was regulated for female workers. This includes leave for rest for women workers / laborers who have experienced a miscarriage.
- Breastfeeding Rights
Nothing says about the right to breastfeed.
It is not certain whether the article related to the right to breastfeeding was changed or removed.
Previously, Article 83 of Law 23/2003 stipulated that female workers / laborers whose children were still breastfeeding had to be given the appropriate opportunity to breastfeed their children if it had to be done during working time.
- Weekly Holidays
1 day off from work or weekly rest for 6 working days.
This means that in a week, as many as 6 working days, 1 day off.
This is different from Law 13/2003 which states that there are 2 options for the weekly rest according to Article 79 paragraph (2) letter b, namely a weekly break of 1 day for 6 working days in one week or 2 days for 5 working days in one week.
b. Worker / Employee Status
Articles regarding PKWT that exist in the Manpower Law are deleted. There are no provisions governing the terms of Fixed Time Workers (PKWT) or contract workers.
This means that there are no restrictions on workers who can be contracted, aka unlimited contract status.
The article in Law 13/2003 that was abolished is Article 59, which regulates that the PKWT agreement for workers is carried out for a maximum of 2 years, then it can be extended again within 1 year.
Referring to the explanation of Article 59, it means that the maximum contract period for workers is 3 years, after which the appointment is carried out or not continued.
Illustration of contract employees in the Omnibus Law on Employment Creation. Illustration of contract employees in the Omnibus Law on Employment Creation
c. Wage
The rules regarding wages have been changed to 7 policies, including:
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- Unit Yield and Time Wages
In this Job Creation Law, it regulates the unit wages and time.
Unit yield wages are wages that are determined based on one time, such as daily, weekly or monthly. This includes hourly wages.
This unit wage is determined based on the results of the work that has been agreed upon.
- Minimum Wage
In the Work Creation Omnibus Law, the minimum wage is stated to be only in the form of the Provincial Minimum Wage (UMP).
This means that the Regency / City Minimum Wage (UMK) and the Regency / City Sectoral Minimum Wage (UMSK) are no longer used.
So that the determination of the minimum wage based on the province or UMP.
- The formula for calculating the minimum wage
In calculating the minimum wage, the formula for the Job Creation Law is used:
UMt + 1 = UMt + (UMt) x% PEt)
Information:
UMt: Minimum wage for the current year
PEt: Annual economic growth
Does not include inflation calculations, but becomes regional economic growth
The formula for calculating the minimum wage in Law 13/2003 is:
UMt + {UMt, x (INFLATION +% Δ PBDt)}
Information:
UMt: The stipulated minimum wage
UMt: Minimum wage for the current year
INFLATION: Annual inflation
Δ PDBt: Annual Gross Domestic Product Growth
4. Bonuses
The Omnibus Law on Employment Creation regulates the provision of bonuses or other awards for workers according to their working period.Minimum wage
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Wage structure and scale
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Overtime pay
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Wages for not coming to work and / or not doing work for certain reasons
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Form and method of payment of wages
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Other things that can be calculated with wages
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Wages as the basis for calculating or paying other rights and obligations
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Previously, Article 88 paragraph (3) of the Manpower Law stated that there were 11 wage policies.
The 4 provisions related to wages in Law 13/2003 which are deleted in the Job Creation Law are:
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Wages for exercising the right to take time off from work
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Wages for severance pay
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Wages for calculating income tax
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Fines and deductions from wages
Meanwhile, the previous Manpower Law did not regulate the provision of this bonus.
Illustration of employee wages in the Employment Creation Omnibus Law. Illustration of employee wages in the Job Creation Law
d. Severance pay
Here are some points regarding severance pay in the Omnibus Law on Employment Creation compared to the Manpower Law:
- Replacement Rights
There is no reimbursement money in the Work Law.
Previously, the Manpower Law regarding compensation for this right was regulated in Article 154 paragraph (4).
- Service Period Remuneration
There is no reward money for a 24-year service period in this Job Creation Omnibus Law.
Previously, Law 13/2003 was related to the provision of reward money for workers / laborers who have worked for 24 years or more to receive 10 months of wages as stated in Article 156 paragraph (3).
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Severance pay
Regarding severance pay in the Job Creation Law, it is as follows:
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There is no severance pay for workers / laborers who were laid off because of a warning letter
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There is no severance pay for workers / laborers who have been laid off due to merger, change in company ownership status
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There is no severance pay for workers / laborers who were laid off because the company lost 2 years and went bankrupt.
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There is no compensation in the form of severance pay for the heirs or their families if the worker / laborer dies
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There is no severance pay for workers / laborers who are laid off because they are about to enter retirement age
Meanwhile, the rules regarding severance pay in the Manpower Law 13/2003 are as follows:
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Severance pay must be given to workers / laborers who have been laid off for committing violations after being given a warning letter stipulated in the work agreement, company agreement or cooperation agreement (regulated in Article 161).
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Severance pay must be given to workers / laborers who have been laid off due to changes in status or company mergers or changes in company ownership, equal to 1 salary, 1 time reward pay, compensation for rights (regulated in Article 156).
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Severance pay is given to workers / laborers who were laid off because the company was losing money and went bankrupt (in accordance with Articles 164 and 165)
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Providing compensation money to the heirs or the worker’s family if the worker / laborer dies.
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Severance pay is given to workers / laborers who have been laid off because they have entered retirement age. Severance pay is given 2 times, reward pay for working period of time and compensation money for rights (in accordance with Articles 156 and 167).
e. Social Security
The regulations regarding social security in the Omnibus Law on Job Creation and Law 13/2003 include:
- Pension Security
There are no criminal sanctions for companies that do not include workers / laborers in the pension security program.
Previously, the Manpower Law stipulated that companies that did not include workers / laborers in the pension security program would be subject to imprisonment for a minimum of 1 year and a maximum of 5 years and / or a fine of at least UMR 100,000,000 and a maximum of UMR 500,000,000.
- Job Loss Guarantee
There is a new social security program arrangement, namely Job Loss Security, which is managed by BPJS Ketenagakerjaan based on social insurance principles.
f. Layoffs
Following are the differences in the provisions regarding Termination of Employment (PHK) which are regulated in the Omnibus Law on Employment Creation 2020 compared to this Manpower Law.
May do layoffs
In Law 13/2003, there are 9 reasons companies may layoffs, including:
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The company went bankrupt
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The company closed due to losses
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Change in company status
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Workers / laborers violate the work agreement
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Workers / laborers make serious mistakes
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Workers / laborers enter retirement age
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The worker / laborer resigns
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The worker / laborer dies
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Workers / laborers are absent
Meanwhile, the Job Creation Omnibus Law adds another 5 points, bringing the total to 14 reasons that allow companies to lay off, namely:
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The company is doing efficiency
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Companies carry out a merger, consolidation, takeover or separation of companies
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The company is in a state of postponement of debt payment obligations
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The company commits an act that is detrimental to workers / laborers
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Workers / laborers experience prolonged illness or disability due to work accidents and cannot carry out their work after exceeding the 12 month limit
Those are the points in the 2021 Employment Creation Omnibus Law that need to be known and understood, both workers in general, and specifically for those of you who work in the Human Resources (HR) or Human Resources (HR) management section of the company.