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Employee Leasing Agreement for Indonesia

Employee Leasing Agreement Template for Indonesia

A comprehensive legal agreement governed by Indonesian law that establishes the terms and conditions for employee leasing arrangements between a staffing company (Lessor) and a client company (Lessee). The document ensures compliance with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and Government Regulation No. 35 of 2021, while detailing the responsibilities of both parties, service fees, employment terms, and operational procedures. It includes provisions for social security compliance, workplace safety, confidentiality, and dispute resolution mechanisms specific to the Indonesian legal context.

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What is a Employee Leasing Agreement?

The Employee Leasing Agreement serves as a crucial document for businesses operating in Indonesia that wish to engage temporary workforce through professional staffing companies. This arrangement has become increasingly important in the Indonesian business landscape, particularly following the implementation of Government Regulation No. 35 of 2021, which provides updated guidelines for outsourcing relationships. The agreement ensures compliance with strict Indonesian labor laws while providing flexibility in workforce management. It covers essential aspects such as employment terms, social security obligations, workplace safety requirements, and financial arrangements. The document is particularly relevant in contexts where companies need specialized workforce solutions, require operational flexibility, or seek to focus on core business activities while delegating employment administration to specialized providers.

What sections should be included in a Employee Leasing Agreement?

1. Parties: Identifies the contracting parties: the employee leasing company (Lessor) and the client company (Lessee)

2. Background: Outlines the context of the agreement, including the Lessor's authority to provide employee leasing services and the Lessee's need for staffing

3. Definitions: Defines key terms used throughout the agreement including 'Leased Employees', 'Services', 'Service Fees', etc.

4. Scope of Services: Details the employee leasing services to be provided, including recruitment, placement, and management of leased employees

5. Term and Termination: Specifies the duration of the agreement and conditions for termination

6. Service Fees and Payment Terms: Outlines the fee structure, payment schedule, and related financial obligations

7. Responsibilities of the Lessor: Details the obligations of the staffing company including payroll, benefits administration, and regulatory compliance

8. Responsibilities of the Lessee: Specifies the client company's obligations regarding workplace safety, supervision, and treatment of leased employees

9. Employment Status and Relationship: Clarifies the employment relationship between parties and confirms the Lessor as primary employer

10. Compliance with Laws: Addresses compliance with Indonesian labor laws, social security requirements, and other relevant regulations

11. Confidentiality: Establishes obligations regarding protection of confidential information

12. Dispute Resolution: Outlines the process for resolving disputes between parties

13. Governing Law: Specifies Indonesian law as governing law and relevant jurisdiction

What sections are optional to include in a Employee Leasing Agreement?

1. Non-Competition and Non-Solicitation: Added when parties want to restrict competitive activities and employee poaching

2. Performance Standards: Included when specific performance metrics or service levels need to be maintained

3. Transfer of Employees: Used when there's possibility of permanent transfer of leased employees to the Lessee

4. Insurance Requirements: Detailed insurance obligations beyond standard requirements

5. Intellectual Property Rights: Added when leased employees may create or work with intellectual property

6. Force Majeure: Included when parties want specific provisions for unforeseen circumstances

7. Data Protection: Added when handling of personal data requires specific attention

8. Training and Development: Included when specific training requirements or development programs are part of the arrangement

What schedules should be included in a Employee Leasing Agreement?

1. Schedule A - Service Fee Structure: Detailed breakdown of service fees, markup rates, and payment calculations

2. Schedule B - Leased Employee Positions: List of job positions, qualifications, and quantity of leased employees

3. Schedule C - Service Level Requirements: Specific performance metrics and service standards

4. Schedule D - Benefits Package: Details of employee benefits, insurance coverage, and social security arrangements

5. Schedule E - Workplace Policies: Relevant workplace policies and procedures applicable to leased employees

6. Appendix 1 - Required Licenses and Certifications: Copies of necessary permits and certifications for employee leasing services

7. Appendix 2 - Standard Operating Procedures: Detailed procedures for employee management, replacement, and issue resolution

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Ƶ

Document Type

Rental Agreement

Cost

Free to use
Relevant legal definitions



































Clauses




































Relevant Industries

Manufacturing

Technology

Construction

Retail

Hospitality

Healthcare

Financial Services

Logistics and Transportation

Agriculture

Mining

Education

Professional Services

Telecommunications

Relevant Teams

Human Resources

Legal

Procurement

Operations

Finance

Compliance

Risk Management

Senior Management

Administration

Talent Acquisition

Relevant Roles

Human Resources Director

Legal Counsel

Procurement Manager

Operations Director

Finance Director

Compliance Officer

HR Manager

Contract Administrator

Risk Manager

Business Unit Head

General Manager

Chief Financial Officer

Chief Operating Officer

HR Business Partner

Talent Acquisition Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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