Govt to enforce social security scheme

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.