Ridwan Max Sijabat, Jakarta – The government will cooperate with the Attorney General's Office and police to enforce a 1992 law on social security programs to provide protection for workers, says a minister.
Manpower and Transmigration Minister Erman Suparno said labor inspectors, along with the police and prosecutors, would visit private and state companies and foundations to check whether they had registered their workers in the obligatory social security programs.
"After 24 years of trying to persuade them, employers who ignore the law should not be surprised when their case is brought to court," the minister said Monday during a hearing with the House of Representatives' labor commission.
The law calls for a maximum six-month jail sentence and/or a maximum fine of Rp 500 million (US$54,809) for employers that fail to register their workers with state-owned insurance company PT Jamsostek.
Companies employing 10 or more workers are required to enroll their workers in healthcare, death benefit, occupational accident benefit and pension benefit programs. They also are required to pay up to 10 percent of their workers' gross monthly salaries as premiums for the programs, while workers pay only 2 percent of their salaries.
The commission asked the minister why only 7.5 million of the 25 million workers registered with Jamsostek had remained active in the company's programs. It also warned that low-income workers could only survive dismissal if they were protected by Jamsostek programs. The law allows workers to collect their pension benefits when they are fired.
It also asked the minister to take action against labor inspectors who accept bribes to ignore violations by companies.
Commission chairwoman Ribka Tjiptaning said they had received numerous complaints from labor unions regarding companies avoiding the social security programs. "Not only employers that simply ignore the law, but also those that register only some of their workers or only the basic salaries of their workers should face harsh sanctions," she said.
The chairwoman added that a large portion of the 30 million workers employed in the formal sector were extremely vulnerable in the event of dismissal although they are paid in accordance with monthly minimum wages.
The government is preparing a regulation that will require employers to provide severance benefits for dismissed workers.
Minister Erman also asked the commission to review the law on social security programs and strengthen the sanctions against those employers found violating the law. "With the current sanctions, employers prefer being fined Rp 500 million to paying Rp 1 billion or more to Jamsostek," he said.
Asked about a large fund of money sitting idle at the Manpower and Transmigration Ministry, the minister said the money had been audited by the Supreme Audit Agency and belonged to workers and labor exporters.
"The funds amount to Rp 385 billion, a large part of which belongs to workers employed in companies in the mining sector and to labor exporters," he said.
The minister said privately owned mining companies were required to set aside 10 percent of the value of projects for workers' pensions, while labor export companies were required to put aside Rp 500 million as a guarantee for their operations.
He said the money did not belong to the state and could not be handed over to the Finance Ministry because it would eventually be returned to workers and labor exporters.