Indonesia

Global Compliance Guide

Labor Requirements

The Labour Law in Indonesia is regulated mainly by The Indonesian Labour Law Act 13 of 2003 also known as Manpower Act. The Act governs the terms and conditions of employment such as working hours, holidays, rest periods, wages, overtime, leave and termination of employment etc. The other Acts that govern labour relationships are The Trade Union Act, 2000, The Industrial Disputes Settlement Act, 2004.

Hours & Pay Regulations

Normal Working Hours

The standard working hours are arranged either as 7 hours per day and 40 hours per week for six working days in a week or 8 hours per day and 40 hours per week for five working days in a week. Indonesian Labour Law Act 13 of 2003, Article 77.

Overtime

An employee is entitled to overtime pay if the work time exceeds the 7 hours in a six-day workweek or 8 hours in a five-day workweek, or for working on weekly rest days, or on public holidays.

 

Maximum Overtime  

Overtime work can be performed by an employee for a maximum of 3 hours per day and 14 hours per week (excluding overtime during weekends or national holidays).

 

Overtime Requirements

      • An employee should provide written consent for the performance of overtime work to the employer, whenever a written order has been issued by the employer.
      • The employer shall pay overtime wages for the work to the employee.
      • There shall be an appropriate amount of rest allowed between the work.
      • The employer shall provide foods and drinks to a maximum of 1400Kcal which shall not be replaced with money, in case of overtime work performed by the employees for 3 hours or more.

Overtime Pay

Overtime is calculated based on an employee’s monthly wage. Wage per 1 hour is equal to 1/173 employee’s monthly wage. Overtime must be paid at 1.5 times the normal hourly rate for the first hour and two times the normal rate for the subsequent two hours.

 

If the wage/salary consists of basic salary and fixed allowance, then the overtime calculation is based on 100% from wage/salary. If the wage/salary consists of basic salary, fixed allowance, and variable allowance and basic salary plus fixed allowance are still lower than 75% from total wage/salary, then the calculation of overtime pay is based on 75% of the total wage/salary.

 

Employees must submit a signed SPL (Surat Penugasan Lembur/Letter of Assignment to Work Overtime) to the employer as a record of the overtime work. Indonesian Labour Law Act 13 of 2003, Article 78 and Ministry of Manpower and Transmigration No. 102/MEN/VI/2004 Article 3 – 10.

Breaks

An employee is entitled to an unpaid break of no less than 30 minutes after 4 consecutive hours of work. An employer shall provide paid breaks to employees to pray or worship God as obliged by their religions.

 

Employers shall also allow female employees to take breaks for breastfeeding during working hours. Indonesian Labour Law Act 13 of 2003, Article 79(1), 80 and 83. 

Work On Rest Days

An employee who works 6 days a week is entitled to no less than one day of rest and two days of rest with 5 workdays in a week.

 

Overtime payment for working on Weekly Rest Days

Employees with 6 working days who work on a weekly rest day shall be compensated as below:

      • For the first seven hours, an employee shall be paid twice the hourly wage;
      • For the eighth hour, an employee shall be paid thrice the hourly wage;
      • For the ninth and tenth hour, an employee shall be paid four times the hourly wage.

Employees with 6 working days who work on a weekly rest day which falls on the shortest working day shall be compensated as below:

        • For the first five hours, an employee shall be paid twice the hourly wage;
        • For the sixth hour, an employee shall be paid thrice the hourly wage;
        • For the seventh and eighth hour, an employee shall be paid four times the hourly wage

Employees with 5 working days who work on a weekly rest day shall be compensated as below:

          • For the first eight hours, an employee shall be paid twice the hourly wage;
          • For the ninth hour, an employee shall be paid thrice the hourly wage;
          • For the tenth and eleventh hour, an employee shall be paid four times the hourly wage.

Indonesian Labour Law Act 13 of 2003, Article 79(2) Ministry of Manpower and Transmigration No. 102/MEN/VI/2004 Article 11.

Public Holidays

Employees are entitled to 15 public holidays in Indonesia:

      • Jan. 1: New Year’s Day
      • Chinese New Year
      • Prophet Muhammad’s Birthday
      • Hindu New Year
      • Ascension of the Prophet Muhammad
      • Good Friday
      • Vesak Day
      • Ascension Day of Jesus Christ
      • International Labor Day
      • Pancasila Day
      • Aug. 17: Independence Day
      • Idul Fitri
      • Idul Adha
      • Islamic New Year
      • Dec. 25: Christmas Day
      • Dec. 26

The holidays that fall on weekends are 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. Employees are not required to work on public holidays unless the nature of their job calls for continuous, uninterrupted operation or under circumstances based on an agreement between the employer and employee.

 

An employee who works on a public holiday is entitled to be paid at the overtime rate calculated as below: 

 

Overtime payment for work on Public Holidays 

 

Employees with 5 working days in a week working on a public holiday shall be compensated as below:

      • For the first eight hours, an employee shall be paid twice the hourly wage;
      • For the ninth hour, an employee shall be paid thrice the hourly wage;
      • For the tenth and eleventh hour, an employee shall be paid four times the hourly wage.

Employees with 6 working days in a week working on a public holiday shall be compensated as below:

        • For the first seven hours, an employee shall be paid twice the hourly wage;
        • For the eighth hour, an employee shall be paid thrice the hourly wage;
        • For the ninth and tenth hour, an employee shall be paid four times the hourly wage.

Employees with 6 working days working on a public holiday which falls on the shortest working day shall be compensated as below:

          • For the first five hours, an employee shall be paid twice the hourly wage;
          • For the sixth hour, an employee shall be paid thrice the hourly wage
          • For the seventh and eighth hours, an employee shall be paid four times the hourly wage.

Indonesian Labour Law Act 13 of 2003, Article 85 Ministry of Manpower and Transmigration No. 102/MEN/VI/2004 Article 11 and Minister of Manpower Regulation No. 6 of 2016 (Regulation 6/2016).

Annual Leave

An employee who has been in continuous employment with the same employer for 12 consecutive months is entitled to 12 days of paid leave annually. The employer can allow such leaves to be taken in one or more short periods but one such period of leave shall be of 6 consecutive days.

 

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. However, such an employee will not be entitled to regular annual leave in those two current years. An employee will be entitled to such a rest period after completing every 6-year period with the same employer. Indonesian Labour Law Act 13 of 2003, Article 79(2).

Minimum Wage

Minimum wages in Indonesia are set at provincial level. Current minimum wage in the province of Jakarta (Capital city) is 4,276,349 rupiah per month.

Special Leave

Sick Leave

An employee who is not able to perform work due to illness is entitled to paid leave in the below manner:

      • For the first 4 months, an employee shall be entitled to 100 percent of their wages;
      • For the second 4 months, an employee shall be entitled to 50 percent of their wages;
      • For subsequent months, an employee shall be entitled to receive 25 percent of their wages prior to the termination of employment.

Note: If the wage consists of basic wage and fixed allowance, the amount of basic wage must not be less than 75 percent of the total amount (of the basic wage and fixed allowance). Indonesian Labour Law Act 13 of 2003, Article 93(2) and 93(3).

Maternity Leave

An employee is entitled to paid leave of 1.5 months before and after the birth of a child. An employee who suffers miscarriage is entitled to a period of rest for 1.5 months or a period as stated in the medical statement issued by a doctor. Indonesian Labour Law Act 13 of 2003, Article 82.

Menstruation Leave

A female employee who feels pain during their menstrual period and who informs their employer, are not required to come to work on the first and second days of menstruation.

Paternity Leave

An employee whose wife gives birth to a baby or suffers a miscarriage is entitled to 2 days paid leave from work. Indonesian Labour Law Act 13 of 2003, Article 93(4)(e).

Marriage Leaves

An employee is entitled to 3 days paid leave in case of their own marriage and 2 days paid leave to marry off their son/daughter. Indonesian Labour Law Act 13 of 2003, Article 93(4)(a) and 93(4)(b).

Bereavement Leave

An employee whose spouse or parent, parents in law or children, children in law dies is entitled to 2 days of paid leave and in case of death of a household member, shall be entitled to 1 day of paid leave from work. Indonesian Labour Law Act 13 of 2003, Article 93(4)(f)(g).

Other Leave

An employee who has their son circumcised or their children baptized shall be entitled to paid leave of 2 days from work.

 

Tunjangan Hari Raya (THR Leave)

An employee who has completed one month of service with an employer is entitled to Religious Holiday Allowance. Employers must pay THR once a year up to a maximum of 7 days of a given religious holiday, as follow:

      • Idul Fitri for Muslim employees
      • Christmas Day for Christian employees
      • Hindu Day for Hindu employees
      • Buddhist Waisak Day for Buddhist employees
      • Chinese New Year for Confucian employees

THR is equal to a minimum of one month’s salary for workers with a minimum of 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. Indonesian Labour Law Act 13 of 2003, Article 93(4)(c), 93(4)(d), 81 and Minister of Manpower Regulation No. 6 of 2016 (Regulation 6/2016).

Last updated on: August 4th, 2020