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A Retention Letter to Employee is a strategic document used by organizations in Indonesia to secure the continued employment of valuable team members during critical periods such as mergers, acquisitions, major projects, or organizational changes. This document, governed by Indonesian labor law, particularly Law No. 13 of 2003 on Manpower and related regulations, serves as a formal offer of additional compensation or benefits in exchange for an employee's commitment to remain with the company for a specified period. The letter typically combines elements of appreciation for the employee's contributions with specific legal and financial terms regarding the retention bonus, payment schedule, and conditions. It's essential for the document to balance business objectives with compliance with Indonesian employment regulations, including proper tax treatment of retention payments and adherence to local labor laws.

1. Company Letterhead and Date: Official company letterhead including company details and current date

2. Employee Details: Full name, position, and employee ID of the recipient

3. Subject Line: Clear indication that this is a retention letter

4. Appreciation Statement: Recognition of employee's contributions and value to the company

5. Retention Offer: Specific details of the retention bonus or incentive being offered

6. Retention Period: Clear specification of the time period the employee needs to remain with the company

7. Payment Terms: When and how the retention bonus will be paid, including any installments

8. Conditions: Performance expectations and conditions that must be met to receive the retention bonus

9. Tax Treatment: Statement about tax implications as per Indonesian tax regulations

10. Confidentiality: Statement regarding the confidential nature of the retention offer

11. Acceptance Terms: How and when the employee should indicate acceptance of the offer

12. Closing: Formal closing and signature blocks for authorized company representative