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Membership Termination of Social Security BPJS for Dissolved Companies

As stipulated in article 13 of Law No. 40 of 2004 concerning National Social Security System (“Law 40/2004”), employer(s) must register themselves and their business for social security programs related to manpower to the Social Security Administrator (Badan Penyelenggara Jaminan Sosial / “BPJS”), which requires them to contribute a certain amount of money for their employee’s insurance/social securities. This obligation is mandatory and cannot be waived. Those programs are Work Accident Security (Jaminan Kecelakaan Kerja), Death Security (Jaminan Kematian), Old Age Security (Jaminan Hari Tua) and Pension Security (Jaminan Pensiun), all of which are commonly, and hereinafter, called “BPJS-TK.

Throughout the COVID-19 pandemic situation, the Indonesian Government has enacted a temporary adjustment concerning the amount of the required contribution in the hope of lightening the burden of employer(s), specifically company employer(s). Many companies are still heavily affected and ended up dissolved and then liquidated, either based on the shareholder’s resolutions, because of insolvency or due to other means. However, a termination of membership caused by dissolution of company employer(s) has not been explicitly regulated until now.

  1. Subjects of Mandatory BPJS-TK Membership & Contribution

    Law 40/2004 used the term “Employer” for subjects of mandatory BPJS-TK Membership, meaning that Indonesian Manpower Social Security law emphasized mandatory BPJS-TK Membership based on their role as an employer and their employment of an “employee.”  Furthermore, article 2 paragraph (3) of Government Regulation No. 83 of 2013 concerning Ninth Amendments of Government Regulation No. 14 of 1993 concerning Administration of Manpower Social Security Program (“GR 83/2013”) gave a limitation of “Employer” as Subject to Mandatory BPJS-TK Membership as follows:

    1. employing at least 10 (ten) employees or more; or
    2. paying a minimum wage of Rp.1.000.000,- (one million Rupiah) each month.

  2. Employment Termination as Legal Consequence

    By dissolving said company employer(s) and liquidating their assets, one of the main legal consequences is the termination of employment for of all its employees as the company employer(s) has lost its legal entity status. Such a company can no longer be categorized as an “Employer” mentioned above, considering that following the termination of employees, it no longer meets the requirements to be subject to the mentioned mandatory membership provision, theoretically invalidating the BPJS-TK membership status and the related contribution obligation from the date the company’s liquidation process is completed onwards.

As mentioned before, no regulation has stipulated a termination of BPJS-TK membership but BPJS has provided a service canal for such an application through other services related to the BPJS-TK membership category, as mentioned in article 3 of BPJS Regulation No. 1 of 2016 concerning Procedures for Membership Registration for Employer and Wage Receiving Employee on Manpower BPJS’s Service Canal for Manpower Social Security Program.

Added by the explanation from BPJS’s customer service on May 2021, such applications are submitted manually by attaching a membership termination application letter, proof of the latest BPJS-TK Contribution payment as required (in the last period of valid membership period/before the liquidation date) and the company’s supporting documents. Should you need legal advisory or consultation for the termination of BPJS-TK membership, please do not hesitate to contact us. Drop us an email at info@schinderlawfirm.com.

Schinder Consultant London Ltd.


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