How does Indonesia’s BPJS Law provide social-security coverage for freelancers?

Law No. 24 of 2011 establishes two public legal entities responsible for administering Indonesia’s national social-security system.

BPJS Kesehatan administers health-security coverage.

BPJS Ketenagakerjaan administers employment-related social-security programmes, including:

• work-accident security;

• old-age security;

• pension security; and

• death security.

The precise programmes available to a participant depend on the person’s participation category and the applicable implementing rules.

BPJS Ketenagakerjaan uses the category Bukan Penerima Upah, abbreviated as BPU, for individuals who independently conduct an economic activity or business to earn income.

This category may include:

• freelancers;

• sole traders and small-business owners;

• professionals;

• artists;

• traders;

• farmers and fishers;

• drivers; and

• other self-employed or informal-sector workers.

An individual freelancer performing Assignments independently may therefore register as a non-wage recipient worker.

Non-wage recipient workers may generally participate in the following BPJS Ketenagakerjaan programmes:

• Jaminan Kecelakaan Kerja (JKK): work-accident security;

• Jaminan Kematian (JKM): death security; and

• Jaminan Hari Tua (JHT): old-age security.

JKK provides protection against qualifying accidents connected with work activities. JKM provides benefits following a participant’s death in circumstances covered by the programme. JHT provides a cash benefit under the conditions governing old-age security.

The programme combination selected and the reported income basis affect the applicable contributions and benefits.

A freelancer participating as a non-wage recipient worker generally:

• registers independently;

• provides the required identity and occupational information;

• selects the applicable programmes;

• declares the relevant income basis where required; and

• pays the corresponding contributions.

Registration may be completed through BPJS Ketenagakerjaan’s approved registration channels.

Contribution levels depend on the selected coverage, declared income and rules in force for the relevant period. Temporary government measures may also affect the amount payable.

Registration as a non-wage recipient worker does not conclusively establish independent status under employment law.

A person registered as BPU may still present employment-classification risk where the practical relationship contains:

• work performed personally and continuously;

• wage-like remuneration;

• Client orders or operational control;

• fixed working hours;

• internal reporting;

• organisational integration; or

• other characteristics of employment.

If the relationship is legally recognised as employment, the person may need to be treated as a wage recipient worker, with the employer assuming the corresponding registration and contribution responsibilities.

Relevant information may include:

• the freelancer’s identity and national identification number;

• BPJS participation status;

• the selected employment-related programmes;

• the registered occupation;

• the relevant income basis;

• contribution-payment records;

• the Direct Client–Vendor Service Agreement; and

• the relevant Assignment.

The absence of BPU registration does not by itself create an employment relationship, but it may leave the freelancer without the relevant employment-related social-security protection.