Each index assigns values between 0 and 100, with higher values representing more rigid regulations. The Rigidity of Employment Index is an average of the other three indices.
Difficulty of Hiring Index 61
Rigidity of Hours Index 0
Difficulty of Firing Index 60
Rigidity of Employment Index 40
Redundancy costs (weeks of wages) 108
RSM AAJ Associates in Jakarta says Indonesian employment law and associated regulations should be carefully reviewed and understood by management.
Foreign companies have to employ an Indonesian national as a counterpart to every expatriate employee.
Normally there are no obstacles in obtaining approval to employ expatriates where the Government believes qualified local people are not available to fill the positions.
Expatriate personnel are permitted employment on the condition that regular training is provided, either locally or abroad to enable gradual ‘Indonesianisation’ of the expatriate position.
Working permits for expatriates are issued only to companies which have an operating licence. The licence is valid for a year or less, but can be extended.
The Government regularly announces a list of positions that are closed to non-Indonesian personnel.
