Indonesian Employment Law Update: National Holidays, THR and Employees with Disabilities

Labor & Employment_2

By Richard D. Emmerson and Indrawan D. Yuriutomo

There have been several Indonesian employment law developments since the beginning of the year. While these are not particularly big changes, it is important for businesses in Indonesia to stay on top of the latest employment rules.

National Holidays and Collective Leave in 2017

The Minister of Religious Affairs, Minister of Manpower and Minister of State Apparatus Empowerment and Bureaucratic Reform have issued a joint decision on National Holidays and Collective Leave in 2017.

The Joint Decree stipulates 14 public holidays in 2017 as follows:

  1. New Year’s Day                                                                January 1
  2. Chinese New Year                                                            January 28
  3. Hindu Day of Silence                                                        March 28
  4. Good Friday                                                                      April 14
  5. Ascension Day of Prophet Muhammad                             April 24
  6. International Labor Day                                                     May 1
  7. Buddhist Waisak Day                                                         May 11
  8. Ascension Day of Jesus Christ                                           May 25
  9. Idul Fitri                                                                             June 25 and 26
  10. Independence Day                                                            August 17
  11. Idul Adha                                                                           September 1
  12. Islamic New Year                                                               September 21
  13. Birth of Prophet Muhammad                                             December 1
  14. Christmas Day                                                                  December 25

Separately, President Joko Widodo recently issued Presidential Decree No. 24 of 2016 to create a new national holiday, Pancasila Day, which will be marked on June 1 beginning in 2017.

The observation of holidays that fall on weekends is not moved to the nearest workday. However, the government may declare certain “bridge holidays”(referred to as “collective leave”) to extend holidays that fall on the weekend.

There are two collective leave holidays in 2017:

  1. Idul Fitri                                                                                June 23, 27 and 28
  2. Christmas                                                                             December 26

Collective leave days are mandatory for civil servants. For civil servants, those “forced leave” days are deducted from the civil servants’ available annual leave entitlements and are not treated as national holidays. Collective leave is not mandatory in the private sector. Some private sector companies encourage employees to voluntarily take collective leave days but cannot force employees to do so.

Religious Holiday Allowance

Minister of Manpower Regulation No. 6 of 2016 regarding Religious Holiday Allowance (THR) for Employees (“MOM No. 6″) requires all employers to provide THR to employees with at least one month of service, regardless of whether the worker is employed on a permanent or temporary basis. Previously, the obligation to provide THR only applied to workers with more than three months of service.

THR must be paid once a year, within a maximum of seven days of a given religious holiday, as follows:

  1. Idul Fitri for Muslim employees
  2. Christmas Day for Christian employees
  3. Hindu Day of Silence for Hindu employees
  4. Buddhist Waisak Day for Buddhist employees
  5. Chinese New Year for Confucian employees

THR is equal to a minimum of one month’s salary (basic salary plus any fixed cash monthly allowances) for workers with a minimum 12 months of service. Employees with more than one month but less than 12 months of service will receive THR on a pro rata basis.

Employers who do not meet their THR payment obligations in due time are subject to a fine amounting to 5% of the total THR amount payable, as well as administrative sanctions in accordance with the applicable employment laws and regulations.

Hiring People with Disabilities

The Government has issued a new law on persons with disabilities, Law No. 8 of 2016, which replaces a 1997 law. The new law provides protections and a guarantee of non-discrimination in the workplace for people with disabilities.

Each private sector employer is required to ensure that at least 1% of its workforce is comprised of disabled persons. Law No. 8 also requires employers to accommodate and provide facilities to enable access by employees with disabilities. Employers who fail to provide such requirements face written warnings, cessation of operations, and suspension or revocation of their business license.

This publication is intended for informational purposes only and does not constitute legal advice. Any reliance on the material contained herein is at the user’s own risk. You should contact a lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and may not be reproduced without the express written consent of SSEK.

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