Pre-Contract Checklist Before Sign The Contract

The agreement letter is important to start before the company and the employees become one team. Almost all of the types of workers need the agreement letter to have clear boundaries of rights and obligation. This letter is needed by the company too. Indonesia has two kinds of agreement letter, PKWT and PKWTT. PKWT is for the contract-based worker or freelancer and PKWTT is for the full-time worker.

In the gig economy, hiring contract-based workers can save the company budget, especially if it just needs a specific role in running some parts of a business function or trying new products/services. The contract-based workers need to sign the agreement letter too before engaging themself in the company.

Before you and the candidates sign the contract, there are some checklists you should consider:

1. The Company’s Data
Make sure the company data from the name of the company, address, type of business, person in charge of the company. The complete data of your company make the agreement more valid.

2. The Employee’s Data
Make sure you write the right data such as name, address, e-mail address, phone number, the position on the team and on the company.

3. The Right and The Obligation
Write clearly the right and the obligation from the company and the employee, including the workflow, deadline, the facilities from the company to working the job, and the punishment if one of the parties breaks the rule.

4. The Remuneration and How to Get The Payment
Check the detail of the amount you get from the job from remuneration, allowance, and overwork charge. Make sure when the employee gets the payment, monthly or per-project rate.

5. The Period of Contract
The period should be clear for employees and the company. The maximum period from the old government regulation is 2 years and can extend once more maximum of 1 year. In the new regulation in the labor cluster, the period of time will be regulated by the government.

The trick of the PKWT agreement is the employee and the company forgot about the period of the contract. KPSG can help you to organize the agreement and remind you of the end of the contract.