The Indonesian government’s new policy on national Public Housing Savings (Tapera) has sparked widespread controversy. The regulation requires a mandatory 2.5% deduction from employee salaries and a 0.5% contribution from businesses/companies. Both workers and employers alike are raising concerns about the additional financial burden.
Overlap with BPJSÂ
Indonesian businesses are facing a rising tide of mandatory deductions. The Indonesian Employers Association (Apindo) said currently companies already contribute 18.24% to 19.74% of employee salaries towards various programs. This burden is further amplified by a weakening rupiah and declining market demand.
Adding to these concerns is the Public Housing Savings (Tapera) program. Companies argue Tapera overlaps with existing programs like Employment BPJS (BPJS Ketenagakerjaan) which already offer home ownership assistance.
Tapera, originally scheduled to take effect in 2027, exemplifies this trend. However, due to a wave of public protests and concerns about program readiness, the government has recently decided to delay the implementation. And according to Government Regulation No. 25/2020, once implemented, non-compliance with Tapera will carry significant sanctions:
1. Written reprimands
2. Administrative fines
3. Public disclosure of non-compliance
4. Suspension of business licenses
5. Revocation of business licenses
Civil Lawsuit to Criminal Penalties
This highlights a broader issue: the expanding compliance landscape for businesses in Indonesia. Beyond traditional areas like taxes and social security, companies must navigate a growing number of mandatory deductions. This not only impacts their bottom line but also requires careful management to ensure compliance and avoid sanctions.
A case in point is the growing number of violations of Employment BPJS (BPJS Ketenagakerjaan) regulations. For instance, in March 2024, the Gianyar Prosecutor’s Office sued hospitality company BIV and construction company JMV for non-payment of contributions.
Legal action has also been taken by BPJS in East Jakarta against a company that had accumulated unpaid contributions of Rp 230,361,062 (approximately USD 14,200). The Director of outsourcing company PT Baliwong Indonesia in East Java was arrested and charged, indicating that non-compliance with Employment BPJS can result not only in civil lawsuits but also in criminal penalties.
The potential consequences of neglecting Employment BPJS is significant. BPJS Law outlines administrative sanctions for non-compliant employers. These sanctions can include written reprimands, fines, and even the denial of crucial public services. This could include vital business permits like building permits, permits required for project tenders, or permits to employ foreign workers.
Most business owners in Indonesia are well aware of the importance of keeping their employees secure and productive. But also lots of them have not yet considered the legal and financial implications of not providing social security for the workers.
Ensure Your Compliance
While Tapera focuses on home ownership for employees, Employment BPJS plays a vital role in their well-being, offering healthcare access, unemployment benefits and retirement security. However, managing BPJS contributions and adhering to regulations can be complicated.
If this is your concern as an employee or business owner, you can talk to our legal team at Seven Stones Indonesia. We specialize in helping businesses to simplify BPJS registration, management, and overall compliance. Our team of experts stays up-to-date on the latest regulations, ensuring your company fulfills its obligations.
Partnering with Seven Stones offers several benefits:
– Reduced workload: We handle the BPJS registration process and ongoing management, freeing up your time and resources.
– Compliance assurance: We ensure you stay compliant with all BPJS regulations, minimizing the risk of sanctions.
– Improved employee relations: Fulfilling your BPJS responsibilities demonstrates your commitment to employee well-being and strengthens your company culture.
Don’t let BPJS compliance become a burden. Contact Seven Stones Indonesia today and let us take care of the complexities. Remember, prioritizing Employment BPJS isn’t just a legal requirement; it’s an investment in workers’ well-being and a commitment to building a secure and productive work environment.
