Administrative Penalties for Non-Compliant Employers for Social Security Program

The Government recently issued Government Regulation No. 86 of 2013 on Procedures for Imposing Administrative Penalties on Employers excluding State Officials, Certain Others, and Employers, Workers, and Recipients of Social Security Assistance (“Regulation”).The Regulation implements Article 17 (5) of Law No. 24 of 2011 on the Social Security Agencies (“BPJS Law”) (See ILD No. 236 ), which provides that a Government Regulation will be issued to further set out administrative penalties for non-compliance with the BJS Law.The Social Security Agencies within the scope of the Regulation refers to: 1) Social Security Agency (“for Health (BPJS Kesehatan); and 2) Social Security Agency for Workers (BPJS Tenaga Kerja) [1] (collectively “Social Security Agencies”).The Regulation is relevant to employers and individuals who fall under the national social security program managed by the Agencies.  This new system  began its operation on 1 January 2014. [2] Registration ObligationsRegistration of participants in the new social security program is broad and the Regulation provides  that it is mandatory for 1) “Employers”, [3] and  2) “Any person who is not classified as an employer, worker, or recipient of  social security subscription assistance" [4] (“Others”).Employers must register their company and employee credentials regarding: employee’s family, employee salary, data on participation in the social security program, and any changes to employee credential. [5] Changes to  employee’ credentials to be submitted to the Agencies consist of the following information: [6]