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Social Security (BPJS) Violations: Sanctions for Employers

Social-Security-BPJS-Indonesia

There are two types of BPJS:

Companies in Indonesia must register the social security (BPJS) of their all their employees. In addition, they must pay the monthly BPJS premium to the national social security body. Failure to do so may result in sanctions for employers which can severely impact the business of the company.

  1. BPJS health, which is the national health insurance; and
  2. BPJS Manpower, which is the national employer insurance, which covers several employee insurances.

To avoid compliance issues and potential business disruptions, we offer administrative compliance packages. When you subscribe to our package, our consultants will process the registration and monthly BPJS contributions on your behalf. This allows you to focus on your core business. However more importantly, you make sure that your company remains 100% compliant and will not be subject to any administrative sanctions.

Type of Violations by Employers

Employers must adhere to the various provisions which are set out under several laws and regulations relating to BPJS. These provisions include the obligations to:

  1. register employees its employees to the BPJS Health and BPJS Manpower program;
  2. report and pay BPJS contributions; and/or
  3. submit a report on the change data of any of its employees.
Type of Administrative Sanctions

BPJS or the related government body can impose the following sanctions to companies who are violating any of the obligations set out above:

  1. Written warning. The first warning letter will give an employers 10 business days to fulfill its obligations. If after the 10-day period the infringing employer still fails to fulfill its obligations, the government will issue a second warning letter covering a subsequent 10 business day period.
  2. Penalties. If the employer fails to rectify its violation after the second warning letter the government may impose penalties. The penalty amount shall depend on the severity of the violation.
  3. Suspension of access to government services. In addition to penalties, the government can impose suspension of access by the company to public facilities. This may have severe impact to the company’s business, as they will not be able to amend corporate data. Moreover, the employer may not be able to apply for work permits for its foreign workers.
Revocation of Administrative Sanctions

The BPJS body and the manpower supervisory agency will monitor the implementation of sanctions. Moreover, they have the authority to request the Public Service Unit to lift sanction of suspension after the employer is fully compliant again.

In summary, to avoid any business disruptive sanctions from the government, it is essential for a company to remain compliant. Therefore, they the processing of BPJS should be performed by qualified HR staff or the company should outsource their social security processing to a third party service provider.