Govt to enforce social security scheme

Ridwan Max Sijabat, The Jakarta Post/Jakarta

The government will start getting tough enforcing the law on compulsory social security programs and insist that employers register all their workers with a program, an official says.

"In cooperation with provincial and regental administrations and state insurance firm PT Jamsostek, the manpower and transmigration ministry has decided to reactivate its supervisory unit to enforce the law so that all workers employed in the formal sector take part in social security programs," the ministry's Director General of Labor Inspections Maruddin Simanihuruk told The Jakarta Post here on Thursday.

Besides deploying 1,140 labor inspectors, he said the government would gradually recruit about 500 new labor inspectors annually to fill a shortage of about 3,000 officers.

"Labor inspectors, who have the right to investigate, will bring to court all employers found to have breached the Social Security Law. Those who bring many violators to justice will be given incentives and promotions," Maruddin said.

The government will also blacklist companies that fail to register their workers with Jamsostek and announce them publicly, he said.

He said only 60 percent, or about 24 million, of an estimated 40 million workers employed in the formal sector had been enrolled in social security programs. Many employers had registered only a selection of their workers or had lied about workers' salaries to avoid paying high premiums, Maruddin said.

According to Law No. 3/1992, companies employing 10 or more workers and/or paying at least Rp 1 million (US$109) in monthly salary are required to register their workers with social security programs.

Workers are required to pay 7 percent of their gross monthly salaries into health care, occupational accident, death and pension programs, with employers responsible for another 5 percent.

The supervisory unit at the ministry was decentralized to the regions after regional autonomy was introduced in 2000, a move that prompted most of the experienced labor inspectors and training instructors to seek other better-paying jobs in local administrations.

Jamsostek's director of operations and services Indra Haryadi said that Jamsostek had increased its operations budget this year to help the ministry enforce the law because the company had no investigative authority.

"In this way, we plan that the remaining 16 million workers employed in the formal sector will join social security programs, employers will adhere to the law when paying their workers' premiums, and more than 50 million workers working in the informal sector will gradually join Jamsostek," he said.

He said the low participation of workers in Jamsostek had a lot to do with the slow economic growth that had led to lower wages and weaker purchasing power.

"The slow economic growth and the less-conducive investment climate has prevented employers from paying their workers better and led to many layoffs," he said. Almost 50 percent of 24 million workers registered with Jamsostek were now unemployed because of layoffs, especially in the forestry and textile industries, he said.

Indra called for the government to begin enforcing the law among state enterprises first. Many workers in electricity firm PLN and railway company PT Kereta Api have not been registered with Jamsostek, he said.