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Last updated on: July 22nd, 2024
Labor Requirements
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. However, certain businesses can have normal working hours that are less than 40 hours per week. This can be implemented by organizations that have one of the following characteristics:
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- They have work that can be completed in less than 7 hours in a day and less than 35 hours in a week.
- They implement flexible working hours.
- They have work that can be completed outside a particular location.
Also, the labor regulation also provides that certain organizations can perform work for more than 40 hours per week. These include energy and mineral resources in certain areas, general mining, upstream oil, and gas, horticulture, agribusiness, and fishery in certain areas. The implementation of these working hours will be further regulated in a ministerial regulation. Indonesian Labour Law No. 2 of 2022 on Job Creation (Regulation), Article 77, Government Regulation No. 35 of 2021.
Overtime
Any work performed beyond 7 hours and 40 hours per week in a six-day workweek or 8 hours and 40 hours per week in a five-day workweek is considered overtime work.
An employee can perform overtime work for a maximum of 4 hours per day and 18 hours per week. The maximum overtime hours do not apply during weekly rest days and public holidays. The approval for carrying out overtime work shall require the employee’s consent.
Overtime Requirements
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- An employee must provide written consent to the employer before performing overtime work, upon receiving a written order from the employer.
- The employer is obligated to pay overtime wages for the work performed.
- Adequate rest periods must be provided between work sessions.
- If employees work overtime for 3 hours or more, the employer must provide meals and drinks totaling up to 1400 Kcal, which cannot be substituted with monetary compensation.
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Overtime pay is typically not granted to employees in higher-level managerial roles, provided these employees receive higher wages compared to other employees.
Pay – 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 hours. Overtime is calculated based on an employee’s monthly wage. Wage per one hour is equal to 1/173 employee’s monthly wage.
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 is still lower than 75% from total wage/salary, then the calculation of overtime pay is based on 75% of the total wage/salary.
Overtime pay is generally not provided to the employees holding higher-level managerial roles, provided that such employees receive higher wages compared to other employees. Law No. 2 of 2022 on Job Creation (Regulation) Article 78 and Ministry of Manpower and Transmigration No. 102/MEN/VI/2004 Article 3 – 10, Government Regulation No. 35 of 2021, §26.
Breaks
An employee is entitled to an unpaid break of no less than 30 minutes after 4 consecutive hours of work. Employers must also provide reasonable paid time to perform religious observances, including Muslim prayers, which are performed five times a day. Law No. 2 of 2022 on Job Creation (Regulation), Article 79(1), 80 and 83.
Weekly Rest
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. Law No. 2 of 2022 on Job Creation (Regulation) Article 79(2) Ministry of Manpower and Transmigration No. 102/MEN/VI/2004 Article 11.
Work On Rest Days
Employees with 6 working days who work on a weekly rest day shall be compensated at overtime rate as below:
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- 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:
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- 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.
Employees with 5 working days who work on a weekly rest day shall be compensated as below:
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- 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.
Law No. 2 of 2022 on Job Creation (Regulation), Article 79(2) Ministry of Manpower and Transmigration No. 102/MEN/VI/2004 Article 11.
Public Holidays
The Government authority issues a decree every year providing the specific date for each public holiday. The exact dates of the public holidays can vary from one year to another. Employees are entitled to 15 public holidays in Indonesia:
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- New Year’s Day – January 1
- 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 – May 1
- Pancasila Day – June 1
- Independence Day – August 17
- Idul Fitri
- Idul Adha
- Islamic New Year
- Christmas Day – December 25
- December 26
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The Government authority issues a decree every year providing the specific date for each public holiday. The exact dates of the public holidays can vary from one year to another.
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.
Pay – An employee who works on a public holiday is entitled to be paid at the overtime rate calculated as below.
Employees with 5 working days in a week working on a public holiday shall be compensated as below:
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- 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.
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Employees with 6 working days in a week working on a public holiday shall be compensated as below:
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- 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.
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Employees with 6 working days working on a public holiday which falls on the shortest working day shall be compensated as below:
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- 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.
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Law No. 2 of 2022 on Job Creation (Regulation) Article 85 Ministry of Manpower and Transmigration No. 102/MEN/VI/2004.
Annual Leave
Special Leave
Duration of Sick Leave: The law does not define the duration of sick leave.
Sick Leave Pay: An employee who is not able to perform work due to illness is entitled to paid leave in the below manner:
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- For the first 4 months, an employee shall be entitled to 100% of their wages;
- For the second 4 months (5th to 8th month), an employee shall be entitled to 75% of their wages;
- For the third 4 months (9th to 12th month), an employee shall be entitled to receive 50% of their wages;
- For subsequent months, an employee shall be entitled to receive 25% of their wages prior to the termination of employment.
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Law No. 2 of 2022 on Job Creation (Regulation), Article 93(2) and 93(3).
Female employees are entitled to 3 months’ maternity leave with full pay. The leave period consists of:
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- 1.5 months prior to the delivery; and
- 1.5 months following the delivery, unless the employee’s doctor certifies otherwise.
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Pay Benefits – An employee is entitled to full wages by their employer
Notification Requirement – An employee has to inform their employer as early as possible before taking their maternity leave. In the event that the birth occurs suddenly/does not match the expected birth date, the female employee or their family members must notify their employer about it.
Duration of Leave – An employee is entitled to 2 working days of paid leave whose wife gives birth to a baby or suffers a miscarriage.
Pay Benefits – An employee is entitled to a full salary by their employer.
Notice Requirement – There is no notice requirement under the law that mandates the employee to inform their employer. As the best practice, they can inform their employer in advance before taking the leave. Indonesian Law No. 2 of 2022 on Job Creation (Regulation), Article 93(4)(e).
An employee is entitled to the following leaves:
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- An employee whose spouse or parent, parents-in-law or children, children in law dies is entitled to 2 working days of paid leave.
- In case of death of a household member, shall be entitled to 1 working day of paid leave from work.
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Law No. 2 of 2022 on Job Creation (Regulation), Article 93(4)(f)(g).
An employee who has their son circumcised or their children baptized shall be entitled to paid leave of 2 days from work respectively.
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 in accordance with the respective Religious holidays of each employee. Religious holidays shall mean the following:
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- 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
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THR is equal to a minimum of one month’s salary for employees 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 based on the following formula – Employment period/12 x 1 month of wage. THR must be paid by the employer no later than 7 days before the Religious Holiday takes place.
Miscellaneous Leaves
Employees are entitled to paid leave for the following purposes:
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- To fulfil obligations to the State;
- To perform religious obligations;
- To undergo educational program required by the employer;
- To perform union duties with the permission of the employer; and
- The employees are willing to do the work that they have been promised to but the employer does not employ or require them to do the job, because of the employer’s own fault or because of reasons that the entrepreneur should have been able to avoid.
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Law No. 2 of 2022 on Job Creation (Regulation), Article 93(2), 93(4)(c), 93(4)(d), 81 and Minister of Manpower Regulation No. 6 of 2016 (Regulation 6/2016) Article 1 – 5.
