There are various types of employment in Indonesia. One of the types is Daily Work Agreement or known as Freelance. It needs to be understood, the definition of Freelance based on Article 10 paragraph (1) and paragraph (2) Decree of Minister of Manpower Number 100 of 2004 (“Kepmenaker 100/2004”), in Chapter V of Freelance is as follows:

• “ (1) For certain jobs changing in terms of time and volume of work and wages are based on attendance, it can be done by contract or daily work freelance.”

•  “ (2) Daily work agreement as referred to in paragraph (1) performed with the provisions of the workers/laborers work less than 21 (twenty one) days within 1 (one) month.”

Based on the citations above, it is clearly known whereas before stipulating Freelance, it shall be confirmed whereas the job that is carried out is the job changing in terms of time and volume of work. Moreover, the working hours in Freelance is less than 21 (twenty one) days in 1 (one) month. Furthermore, it is known whereas Freelance may be changed to Indefinite Time Working Agreement (“PKWTT”) if it meets the qualifications as stated in Article 10 paragraph (3) Kepmenaker 100/2004 that stated whereas:

•  “ (3) In the event that the workers/laborers work 21 (twenty one) days or more for 3 (three) consecutive months or more, then the casual labor agreement turned into PKWTT.”

Furthermore, it should be taken into account that Freelance must meet the administrative requirements as mentioned on Article 12 paragraph (1) and paragraph (2) Kepmenaker 100/2004, which are:

•  “ (1) Employers who employ workers/laborers in jobs as referred to in Article 10 shall issue daily work agreement in writing with the workers/laborers.”

It shall be confirmed whereas Freelance must be made in writing, and Freelance at least meet the requirements as referred to Article 12 paragraph (2) which stated:

•   “ (2) Daily work agreement/Freelance as referred to in paragraph (1) may be made in the form of a list of workers/laborers who do the work as referred to in Article 10 at least the following: 
  - name/address of company or employer;
  - name/address of workers/laborers;
  - type of work performed;
  - amount of wages and/or other benefits.
  

Wages / Incomes and Allowances

Scheme of Freelance’s wages is regulated in a Government Regulation Number 78 of 2015. Wages of Freelance workers may be stipulated based on 2 (two) schemes, which are: wages based on time, and wages based on result. Other than wages, there are other components which are Religious Holiday Allowance dan Social Allowance. The calculation for the components concerned are as follows:

Workers with 12 (twelve) months or more of working period which is calculated based on average of wages in the latest of 12 (twelve) months before Religious Holiday;

Workers with working period less than 12 (twelve) months, wage of 1 (one) month is calculated based on average of wages in working period.

• Thus, those are the essential points that shall be taken into account in the implementation of Freelance based on working relation between the Entrepreneurs and Workers.

• It needs to be understood, by the issuance of Law Number 11 of 2020 concerning Job Creation, there has been draft of government regulation regulating freelance provisions. In principle, there is no modification to explanation as mentioned above. However, shall the draft of government regulation is issued, then it would become the effective law binding as Freelance provision.

This Article is generally made for the purpose of ANR Law Firm publication only and should not be treated as legal advice for your legal problem. Shall you have any further question, kindly contact the Advocate who authored this article at anrlawfirm@anr-lawfirm.com.

Author: Sarah Sylvania Hutagalung, S.H.