Intern Stipend Cost-Sharing Scheme May Lower Company Participation

The Indonesian government's initiative to involve companies more actively in the National Internship Program, by asking them to shoulder 20-30% of intern stipends, is facing scrutiny. While the intention is to foster deeper corporate engagement, labor law experts express concern that this burden-sharing model could inadvertently dampen business enthusiasm for the program.

This concern is rooted in the observation that even during the initial phase, where the government fully covered intern stipends (equivalent to the regional minimum wage), corporate participation was already somewhat limited. The suggestion that companies now contribute a significant portion of these stipends, beyond covering basic transportation and meal allowances, raises questions about the program's attractiveness and feasibility for businesses, particularly those with tighter margins.

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If the government now asks companies to pay 20-30 percent of the intern stipends, it is only natural. However, the intention needs to be clear, whether it is an additional benefit for the interns or to reduce the government's burden?

Clarity is paramount regarding the objective of this new policy. Is the company's contribution intended as an additional benefit for the interns, or is it primarily a mechanism to reduce the government's fiscal burden? Without clear objectives and a thorough understanding of the potential impact on corporate willingness to participate, the program risks seeing reduced engagement, undermining its goal of providing valuable training opportunities to a large number of young Indonesians. The Ministry of Manpower is currently evaluating this proposal, aiming to balance government support with corporate responsibility.

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We ask them (companies) to share the burden of the stipends. Yes, 20-30 percent to be borne by the corporation.