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Freelance Rights in Indonesia: HR Guide to Compliance
Get a detailed look at freelance rights in Indonesia with our HR guide. Explore how freelancers manage project-based work and the differences from permanent employees.
Updated Jul 22, 2024
Freelance Rights in Indonesia: HR Guide to ComplianceIn the ever-evolving world of work, job patterns have diversified, including the rise of freelance or daily contract work. This system offers flexibility for workers to take on projects or tasks based on the needs of a company.
Therefore, it is crucial for HR professionals and companies to understand the rights of freelance workers in Indonesia.
This article will delve deeply into the rights of freelance workers in Indonesia.
How Freelancers Manage Project-Based Work
Freelance workers, also known as independent contractors or daily workers, are individuals who perform work independently, often for various clients or projects. Unlike permanent employees, freelancers do not have long-term contracts with a single company. Instead, they operate on a project or task basis, which is temporary or daily.
With the flexibility to select their projects, freelancers set their own schedules and tailor their task management to their needs. Because their work is not tied to specific hours, they can often adjust their working hours based on personal preferences and availability, as long as they adhere to project deadlines.
In a wide array of industries, such as graphic design, writing, software development, translation, and digital marketing, freelancers find opportunities. Depending on the scope of the project and required skills, they might work individually or collaborate in small teams.
Differences Between Freelance Workers and Permanent Employees
The primary differences between freelance workers and permanent employees lie in their employment status and contract duration:
Contract Status and Duration
Freelance workers have short-term contracts oriented toward specific projects. They do not have a permanent attachment to any single company and can work for multiple clients or projects concurrently.
In contrast, permanent employees have stable, long-term contracts with set work hours and locations determined by the company.
Rights and Protections
Freelance workers generally have fewer rights compared to permanent employees. They might not have access to social security benefits, paid annual leave, or other employee benefits.
Permanent employees, on the other hand, have more comprehensive rights, including social security, paid annual leave, sick leave, health benefits, and potentially pension plans.
Flexibility and Work Hours
Freelancers enjoy flexibility in managing their work schedules. They can select projects based on their personal preferences and availability.
Permanent employees usually have more consistent work schedules tied to the company’s operating hours and are expected to be present at the workplace regularly.
Administrative Management
Freelancers are responsible for their own administration, including tax payments and financial management. They need to manage their rights and obligations independently.
Permanent employees typically have simpler administrative tasks as the company handles tax payments and financial management as part of the payroll process.
Regulations for Freelance Workers under Job Creation Law
The latest Employment Law in Indonesia includes regulations governing freelance workers. These regulations cover wage rights, social security, leave, and other protections.
According to Government Regulation No. 35/2021 Article 10 (1), companies can hire freelance workers under a fixed-term work agreement (PKWT). This agreement can be written and collective.
According to HukumOnline, freelance workers can be employed for less than 21 days in a month. If they are employed for more than 21 days for three consecutive months, they are legally considered permanent employees (PKWTT).
Rights of Freelance Workers
Freelance workers have basic rights that employers need to recognize, such as fair compensation for the work completed. The following are the rights and obligations of freelance workers:
Fair Compensation
Freelancers are entitled to fair pay that corresponds with the project they are working on. It is essential to ensure that the value of their work is appropriately recognized.
Health and Safety Protection
Although freelancers do not have a permanent attachment to a company, they are entitled to a safe working environment and appropriate health protections during their projects. Additionally, freelancers are entitled to social security under BPJS BPU (Non-Wage Recipient).
Intellectual Property Rights
If freelancers create creative works or intellectual products during a project, they have rights to copyrights and recognition for their contributions.
Contract Transparency
Freelancers have the right to clear and transparent contracts from employers, which should include project details, work schedules, and promised compensation.
Companies hiring freelancers must ensure transparent contracts and adhere to regulations regarding fixed-term agreements. By recognizing these rights, employers can foster a fair and compliant work environment for their freelance workforce.
FAQ About Freelance in Indonesia
Is Freelancing Legal in Indonesia?
Freelancing is a type of work that receives legal protection. According to Law No. 11 of 2020 on Job Creation and Government Regulation No. 35 of 2021 concerning fixed-term work agreements, outsourcing, working hours and rest periods, and termination of employment, freelancing is legally recognized.
Does Freelancing Require Capital?
Freelancing is a type of work that does not require any business capital. In this field, you can offer various services such as writing, graphic design, translation, digital marketing, and more.
How Many Hours Do Freelancers Work?
Freelancers typically work fewer than 21 days in a month and are paid based on the amount of work completed multiplied by the rate for each task.
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Lavtania
Digital Marketing Executive at Epicareer
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