Indonesian Government Simplifies Outsourcing Requirements
In early August 2019, the Indonesian Minister of Manpower amended Minister of Manpower and Transmigration Regulation Number 19 of 2012 on The Requirements for Outsourcing (“MOMR 19/2012”) by issuing Minister of Manpower Regulation Number 11 of 2019 on the Second Amendment to Minister of Manpower and Transmigration Regulation Number 19 of 2012 on The Requirements for Outsourcing (“MOMR 11/2019”). MOMR 11/2019 aims to simplify manpower outsourcing requirements to adjust to current needs.
Law Number 13 of 2003 on Manpower (“Manpower Law”) and MOMR 19/2012 recognize 2 types of outsourcing: (i) Business Activities Outsourcing and (ii) Manpower Outsourcing. MOMR 11/2019 only changes the requirements for Manpower Outsourcing. It does not amend those for Business Activities Outsourcing. Therefore, we do not discuss Business Activities Outsourcing below, but only focus on Manpower Outsourcing.
Under Article 66 (1) of the Manpower Law, in principle, the work outsourced in Manpower Outsourcing should be considered ‘supplemental work’, not related to the production process of the user (ie. its core business). MOMR 19/2012 only allowed Manpower Outsourcing for the following services:
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