New Law May Impact Financial Sector Employees
November 9, 2017
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Executive Summary
The financial services authority recently introduced a regulation that may significantly impact foreign workers in the financial sector. The key changes may affect local-to-foreign worker ratios, language requirements and reporting requirements.
The situation
Rules for foreign workers in financial sector may change, in line with a recently introduced regulation by the Financial Services Authority (OJK). The rules have not yet been implemented and an implementation date is not clear at this time.
A closer look
The new requirements include the following:
- New ratio requirement. Two Indonesian nationals may be required to act as an understudy to each foreign national. This contrasts with other industries under the authority of the Ministry of Manpower, which only have a 1:1 local-to-foreign worker ratio.
- Impact: Work permit applications may need to be accompanied by information about the understudies.
- Impact: Work permit applications may need to be accompanied by information about the understudies.
- Language requirement. Foreign nationals in the financial services sector may be required to be proficient in Bahasa Indonesia within one year of starting work.
- Impact: Work permit renewal applications may require a Bahasa Indonesia language proficiency certificate. There are no guidelines around obtaining these certificates.
- Impact: Work permit renewal applications may require a Bahasa Indonesia language proficiency certificate. There are no guidelines around obtaining these certificates.
- Reporting requirement. Financial institutions who employ foreign nationals may be required to report the progress of their knowledge transfer programs annually to the financial services authority.
- Regulation of work permit applications. The OJK will exclusively regulate and adjudicate work permit applications filed by financial institutions. Previously, either the OJK or the Bank of Indonesia oversaw these applications, depending on the exact institution applying for work permits.
Fragomen will continue to monitor the regulations closely and report on developments.
This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].
