Labor unions urged to help enforce law on social security

JAKARTA (JP): State-owned insurance company PT Jamsostek called on labor unions to help promote the 1992 law on social security programs for workers, saying the way the government enforces the law is not effective enough.

Junaidi, the newly appointed president of PT Jamsostek, said labor unions could play an active role in monitoring the enforcement of the law.

"We want labor unions to be our partners in encouraging employers to participate in the programs because Jamsostek has no authority to enforce the law," he told the congress of the transportation trade union here on Saturday.

He also suspected many employers have been involved in collusive practices with supervisory staff from the manpower and transmigration ministry to evade payment of the mandatory budget for social insurance for their workers, thereby violating the law.

"We found there are collusive practices in the field and we have reported these cases to the manpower and transmigration ministry," he said.

According to the findings, some employers registered only a small number of their employees with Jamsostek while many others reported misleading data on their workers' wage structures in an attempt to reduce to a minimum their financial obligation to the insurance company.

"Such malpractice has brought a loss to workers participating in the programs because the financial benefits those workers stand to gain from the programs depends mostly on their monthly premium and on how long they have participated in the social security programs," he said.

He speculated that the malpractice was mostly connected with the manpower and transmigration ministry's monopoly in enforcing the law.

Jamsostek has proposed that the government revise the law to allow the insurance company and labor unions to enforce the law, he said.

According to the law, of the total 9.24 percent of workers' monthly salaries channeled into the programs, employers are obliged to contribute 7.24 percent while the remaining two percent for the pension fund is collected from the workers.

The programs which are mandatory for companies employing 10 workers or more comprise of a health-care scheme (between 3 percent and 6 percent), an occupational accident scheme (between 1.24 percent and 1.7 percent, pension funds (5.7 percent) and a death scheme (0.3 percent).

Junaidi said labor unions through their units in companies could check on whether their members have been registered in the social security programs.

"Such a role should be played by labor unions to improve protection of their members," he said.

He said so far, only 15 million workers out of a workforce of around 80 million have participated in the program and the total funds collected for the programs have reached Rp 11 trillion (US$1.2 billion).

He said employers should not see the social security programs only as a mandatory obligation and a financial burden they have to shoulder, but as a collaborative partnership to help improve protection for their workers.

"With the social security programs, employers could forge a partnership with Jamsostek to tackle labor issues in their company while they could concentrate on their own business," he said.

He added Jamsostek has also planned to approach associations of becak drivers and street vendors in the informal work sector to participate in the programs. (rms)