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An employment contract is a written agreement between an employee and an employer that contains rights, obligations and terms of employment. This letter is mandatory for the company to provide for prospective employees before they start their job officially. However, companies must comply with the applicable UU Ketenagakerjaan (Labor Law).
The legal basis that binds the Work Contract Agreement is UU No. 13 of 2003 concerning Manpower (Ketenagakerjaan). To be precise, according to Pasal 1 Ayat 14:
“A work agreement is an agreement between a worker/labourer and an employer which contains terms of employment, rights and obligations of the parties.”
Work contracts must be created on the accordance of Pasal 51 Ayat 1 of UU Ketenagakerjaan (Manpower Law):
The difference between the two are:
A work certificate is a written letter containing information or a statement that you work for a company. The information details are: name, title, address, and other personal data. Usually, this letter is made by HRD or the company’s boss at the request of the employee. This letter is also known as Paklaring or work experience letter.
Some of the functions of a Certificate of Employment are:
The differences between each of these letters include:
1. Work Contract
A work contract is a written agreement regarding an agreement between the worker and the employer regarding rights, obligations and conditions of work. It contains points regarding position and type of work, nominal wages, term of contract, employment status, benefits, and other important points regarding workers’ rights and obligations.
2. Work Recommendation Letter
A recommendation letter is a document that guarantees someone based on the characteristics and classification of that person. This letter must be able to describe the person’s qualities, integrity, and even his leadership potential. As a result, this letter can be used to justify, state, or strengthen something from the applicant.
3. Work Experience Letter
A work experience letter is a letter that the company makes and contains information about expertise, behavior and skills at work. This letter usually explains your last position and how long you worked at the company.
Paklaring is a letter explaining that you have worked in a company with a certain position and period of time. Therefore, this letter is given to you when you are no longer working at the company.
In Pasal 3 Ayat 2 in Government Regulation No. 86 of 2021, a list of documents that need to use a stamp duty are:
According to the policy contained in UU No. 10 of 2020 concerning Stamp Duty; a 10,000 stamp duty will be imposed on documents declaring an amount of money with a nominal value of more than IDR 5,000,000.00 which:
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