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Legal Updates | Indonesian Employment Law: National Holidays, THR & Employees with Disabilities

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

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 1st June 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 – 23rd, 27th and 28th June
  2. Christmas – 26th December

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 protection 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.

SSEK - 9th June 2016

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Indonesia Snapshot

Capital: Jakarta
Population: 259 million (2016)
Currency: Indonesian Rupiah
Nominal GDP: $936 billion USD (IMF, 2016)
GDP Per Capita: $3,620 USD at Current Prices (IMF, 2016)
GDP Growth: 5.0% (2016)
External Debt: 36.80% of GDP (BI, Q2 2016)
Ease of Doing Business: 91/190 (WB, 2017)
Corruption Index: 90/176 (TI, 2016)