Many employers cheat on worker insurance

Many employers cheat on worker insurance

Ridwan Max Sijabat, The Jakarta Post, Jakarta

State-owned social security company PT Jamsostek is encouraging
employees to check their participation in the social security
schemes as many employers were found to be dishonest in
registering their employees with the mandatory insurance
programs.

"Employees have the right to know whether they are registered
with all the four insurance schemes and whether their premiums
paid by their employers to Jamsostek are based on their actual
monthly salaries," Jamsostek president Achmad Djunaidi said.

Djunaidi made the call when he paid on Thursday compensation
for five workers of PT Nestle Indonesia who were killed in a
vehicular accident on the Jakarta-Bogor toll road last month.

He revealed that 50 percent, or more than 50,000, of 108,000
companies participating in the social security program, have
registered only some of their workers and reported their actual
monthly salaries to Jamsostek, in an attempt to reduce the
financial burden of joining the programs.

"Workers who are not registered with Jamsostek gain no
insurance benefits when they fall sick, experience work-related
accidents or enter their mandatory retirement age of 60.

"The smaller the premium workers and their employers pay to
the insurance schemes, the less benefit they will gain," he said.

According to Junaidi, workers should file complaints about
their management to the Ministry of Manpower and Transmigration
if their premium is not paid in line with their monthly salaries
as is required by law.

Law No. 3/1992 on social security programs stipulates that all
companies employing ten workers or more are obliged to
participate in the social security programs which comprise of a
health care scheme, occupational accident scheme, compensation
for next of kin in case of death and a pension scheme.

Of the 13.7 percent premium to be paid for the four schemes,
workers are obliged to pay 2 percent while the remaining 11.7
percent is covered by their employers.

Djunaidi reiterated that the benefits workers gain, depends on
the amount of premium they pay.

"Many workers are unaware of the benefits of the basic
insurance schemes because they do not pay their premium directly
to Jamsostek," he said.

He cited as an example that the families of two workers of the
Sari Club who were killed in the Oct. 12, 2002 bombing in
Denpasar, Bali gained only around Rp 9 million (US$1,097) in
compensation from Jamsostek because their employer reported to
Jamsostek that their monthly salary was only Rp 170,000.

"The manpower and transmigration office in Denpasar should
take action against the employer because the report was
completely inaccurate since the minimum wage in the province last
year was Rp 341,000.

The family of the director of the North Sumatra Development
Bank who was killed in a collision in Jakarta last year received
compensation amounting to only Rp 40 million because his company
reported to Jamsostek that his monthly salary was only Rp 1
million.

"But, it's impossible that a bank president would be paid only
Rp 1 million per month," he said, explaining that such deceit has
affected recipients of the insurance program.

According to the law, a worker who is killed in a work-related
accident has the right to forty-times or 4,000 percent of his or
her monthly salary which is paid to his/her next of kin.

Ira Yovita, one of Nestle's workers killed in the traffic
accident gained more than Rp 181 million in compensation and
pension funds which was paid to her parents.

Ira, who had been employed for seven months in the foreign
company received a monthly salary of Rp 5 million, which was
reported transparently to Jamsostek by Nestle.

Jamsostek's operation director Djoko Sungkono said his company
was still promoting the social security law to improve employers'
awareness of the importance of insurance coverage for their
employees.

"Besides, the government through the manpower and
transmigration minister should start enforcing the law to help
provide protection for Indonesian workers both at home and
overseas," he said.

Djoko added that the House of Representatives would likely
revise the law to allow Jamsostek to appoint special staff to
enforce the law as is done in many other countries.