Gov’t to Draft Regulation on Relaxation of Employment Insurance Payment For Companies Amid COVID-19 Outbreak

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation     Date 30 April 2020
Category: News
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Minister of Manpower Ida Fauziah delivers her press statement after attending a Limited Cabinet Meeting through a video conferencing, Thursday (30/4). (Photo by: PR / Ibrahim).

In a bid to ensure welfare of the workforce amid the ongoing COVID-19 pandemic, the Government has announced plan to draft a Government Regulation on the relaxation of employment insurance payment for companies that still employ their workers.

According to Minister of Manpower Ida Fauziah, the Ministry will coordinate with relevant ministries and institutions to complete the draft of the regulation.

“We will hold an inter-ministerial committee meeting. Afterwards, the finalization process of the regulation will be at Ministry of Law and Human Rights. We expect to finalize the regulation immediately,” the Minister said on Thursday (30/4) after attending a Limited Cabinet Meeting through a video conferencing.

For the record, the regulation will contain several things. They are as follows:

First, adjustment of employment insurance payment will be implemented for work accident insurance, life insurance, as well as pension insurance payments.

“The regulation will reduce work accident insurance, life insurance, and pension insurance payments. Retirement security is also eligible for relief in the form of delays in payment. The old-age savings program is not included in the relaxation,” the Minister added.

Second, work accident insurance will be paid to wage-earning workers around 10 percent of normal payments.

“For non-wage-earning workers who do not receive monthly salaries, work accident insurance will be paid at 10 percent of the participant’s income as stated in a Government Regulation Number 44 of 2015. For workers in construction sector companies, work accident insurance contribution is 10 percent of the remaining payment that has not been paid yet,” Ida said.

Third, life insurance for wage-earning workers will only be paid at 10 percent of normal payments.

“For non-monthly-wage-earning workers, life insurance will be at Rp600,000 per month. For workers in construction service companies, life insurance payment is at 10 percent of the remaining payment that has not been paid yet,” the Minister said.

Fourth, relaxation of pension insurance will be provided in the form of delays in payment.

“The pension insurance will still be paid at 30 percent of the total payment, by no later than the 15th of the next month. The rest of pension insurance amounting to 70 percent can be paid all at once or gradually until October 2020,” Ida said.

Fifth, the Government Regulation will also regulate the adjustment of insurance payments that will start in April and can be extended for three months.

“Before the three months’ extension, we will evaluate the results of the regulation implementation together with Minister of Finance, the National Social Security Board (DJSN), and the Workers Social Security Agency (BPJS Ketenagakerjaan),” Ida added.

By easing the insurance payments, the Minister continued, it is expected that companies can fulfill their obligation to pay (the Eid al-Fitr) holiday bonus.

“We will issue a circular on the provision of Eid al-Fitr bonuses,” the Minister added.

In the meantime, Coordinating Minister for Economic Affairs Airlangga Hartarto said that there are 15,747 industrial companies with a total of 4.7 million employees that still operate amid the coronavirus pandemic.

“In a normal situation, there were more than 40,000 manufacturing sectors operating with 17 million workers in the sector. We hope companies will be back in operation when the situation improves,” Airlangga said.

According to Airlangga, the incentives will be given on the condition there are no layoffs.

The Minister also said that the President has ordered relevant ministers to review previous decision regarding social assistance for 2.7 million farmers.

“We will discuss social assistance for farmers comprehensively, whether it will be Rp300,000 in cash and Rp300,000 in the form of farming production facilities,” Airlangga said. (TGH / EN)



Translated by: Syarifah Aisyah
Reviewed by: M. Ersan Pamungkas

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