Global Compliance Desk – Indonesia

Indonesia Job Creation Law No. 11 of 2020 Brings Changes to Manpower Law (Labor Code)
On November 2, 2020, the President of the Republic of Indonesia signed the Job Creation Bill. The Bill has been enacted as Job Creation Law No.11 of 2020 (the “Job Creation Law”). Certain provisions of Law No. 13 of 2003 on Manpower (the “Manpower Law”) are amended via Job Creation Law and are effective from November 2, 2020.

Job Creation Law along with Manpower Law amends 73 laws including Job Security Law, Law No. 40/2004 The National Social Security System, etc.

Key amendments to the Manpower Act relating to labor employment are as follows:

  • Overtime – Currently, an employee can perform overtime up to a maximum of 3 hours per day and 14 hours per week. Via Job Creation Law, the overtime threshold has been increased up to 4 hours per day and 18 hours per week. The approval for carrying out overtime work shall still require the employee’s consent.
  • Weekly off – Under the current law, employees with a 5-day work week (maximum of 8 hours per day before overtime), are entitled to 2 days off from work per week, and employees with a 6-day workweek (maximum of 7 hours per day before overtime) are entitled to 1 day off. The amendment, however, merely stipulates that employees with a 6-day workweek shall be entitled to at least 1 day off from work per week.
  • Annual Leave – An employee currently receives 12 days of paid annual leave if he/she has been in continuous employment with the same employer for at least 12 consecutive months, which can be taken in one or more short periods. Also, an employee who completes 6 years of continuous service with an employer is entitled to 1 month of paid leave (rest) which will be provided by the employer in both the seventh and eighth years. 
    Following the amendment, such extra vacation has been deleted from the legislation and can be provided if agreed between employer and employee and made binding through a collective agreement, employment agreement, etc.
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