Regulations Derivative to the Job Creation Law, the Maximum Limit of the PKWT Work Contract is 5 Years

TEMPO.CO, Jakarta – President Joko Widodo or Jokowi has signed a derivative regulation Work Creation Act namely Government Regulation Number 35 of 2021 concerning Specific Time Work Agreements (PKWT), Transfer of Resources, Working Hours, Working Relationships and Rest Times, and Termination of Employment (PHK).

In the PP it is stated that PKWT is based on; period of time or completion of a certain job. Article 8 PP 35/2021 regulates the maximum time limit contract PKWT for 5 years.

“PKWT based on the period as referred to in Article 5 paragraph (1) can be made for a maximum of 5 (five) years,” said the article Article 8 paragraph (1) PP 35/2021.

Furthermore, paragraph (2) regulates, if the contract expires and the work being carried out has not been completed, the employer can extend the PKWT for a period according to the agreement between the entrepreneur and the worker. However, the total period and its extension shall not exceed 5 years.

Article 12 regulates, PKWT cannot require a probationary period. In the event that a probationary period is required, the required probationary period is null and void and the working period is still counted.

Read: PP Derivative Work Creation Law: Companies Can Lay Off Workers Without Full Severance Pay

Article 15 of this rule also requires employers to provide compensation money for workers or laborers with PKWT status. Compensation money is given at the end of the PKWT.

Compensation money is given to workers who have a continuous work period of at least one month. Furthermore, Article 16 regulates the amount of compensation money that must be given.

PKWT workers with a continuous work period of 12 and twelve months will receive one month’s compensation of wages. As for non-permanent contracts with a work period of one month or more, but not up to 12 months, compensation money is calculated proportionally by dividing the working period by twelve and multiplying by one month.

In the rules derived from this Copyright Act, Employees or laborer those with non-permanent contracts of more than 12 months receive compensation proportionally divided by twelve and multiplied by one month. The wages used as the basis for calculating the payment of compensation money consist of the basic wage and fixed allowances.



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