Navigating Through the New PKWT Rules with MPHRO Partner

After the release of Omnibus Law in Indonesia last year, we’ve started to feel the impact on our business landscape. One of the most talked-about is definitely the changes it makes on PKWT (Perjanjian Kerja Waktu Tertentu) or Fixed Time Employment Agreement. For all HRs and office managers, check this recap!

All eyes now are on the aspect of PKWT compensation money, which is paid at the end of the PKWT. This means that the Compensation Money in question must be paid by the Company on the day the PKWT ends. It’s very important that the company pays attention to these new rules, to avoid unwanted issues and to retain their workers well.

Navigating Through the New PKWT Rules with MPHRO Partner

- Workers who are entitled to receive PKWT Compensation Money are every PKWT worker with a working period of at least 1 month continuously, whose PKWT ends with the reason for the expiration of the PKWT period or the completion of the work agreed upon in the PKWT.

- Regulation on PKWT Compensation Money also applies to PKWT workers whose PKWT is terminated by one of the parties before the PKWT period ends; but it does not apply to PKWT workers with the status of Foreign Workers.

- In the event that the PKWT is extended, the compensation is given at the end of the PKWT period before the extension (the next compensation money is given after the extension of the PKWT period ends)

We also should note, this calculation does not apply to PKWT workers in the SME (Small Medium Enterprises). If your organization's context is SME, according to the law, the amount of Compensation Money depends on the agreement between PKWT workers and the company.

Should you need any assistance in adjusting your HR matters to these new PKWT regulations, feel free to reach us through KPSG!

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