Last updated on: April 27th, 2022

Labor Requirements

The Labour Law in Indonesia is regulated mainly by The Indonesian Labour Law Act 13 of 2003 (also called as Manpower Act) as amended by Law No. 11/2020 called as Job Creation Law. 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 regulation that governs labour relationships is Government Regulation No. 35 of 2021.

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:

    • 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 Act 13 of 2003 as amended by Law No. 11/2020 (Job Creation Law), 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

      • 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 1400 Kcal which shall not be replaced with money, in case of overtime work performed by the employees for 3 hours or more.

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. Indonesian Labour Law Act 13 of 2003 as amended by Law No. 11/2020 (Job Creation Law), 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. An employer shall provide paid breaks (no defined duration) to employees to pray or worship God as obliged by their religions.  Indonesian Labour Law Act 13 of 2003 as amended by Law No. 11/2020 (Job Creation Law), 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. Indonesian Labour Law Act 13 of 2003 as amended by Law No. 11/2020 (Job Creation Law), 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:

    • 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 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:

    • 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 as amended by Law No. 11/2020 (Job Creation Law), 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:

      • 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
      • Independence Day
      • Idul Fitri
      • Idul Adha
      • Islamic New Year
      • Christmas Day

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.

 

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:

      • 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 as amended by Law No. 11/2020 (Job Creation Law), Article 85 Ministry of Manpower and Transmigration No. 102/MEN/VI/2004. 

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.

 

Previously, 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 year. 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.

 

However, such extra vacation has been removed from the legislation and can be provided if agreed between employer and employee and made binding through a collective agreement, employment agreement, etc. Indonesian Labour Law Act 13 of 2003 as amended by Law No. 11/2020 (Job Creation Law), Article 79(2), and Law No. 11 of 2020 on Job Creation (“Omnibus Law”).

Minimum Wage

Minimum wages in Indonesia are set at the provincial level. The current minimum wage in the province of Jakarta(Capital city) is 4,641,854 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% 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.

The law does not define the duration of sick leave. 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 respectively. 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.

 

Breastfeeding Break

Employers shall also allow female employees to take paid breaks for breastfeeding during working hours. Indonesian Labour Law Act 13 of 2003 as amended by Law No. 11/2020 (Job Creation Law), Article 82.

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 as amended by Law No. 11/2020 (Job Creation Law), 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 their son/daughter. Indonesian Labour Law Act 13 of 2003 as amended by Law No. 11/2020 (Job Creation Law), 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, the employee shall be entitled to 1 day of paid leave from work. Indonesian Labour Law Act 13 of 2003 as amended by Law No. 11/2020 (Job Creation Law), 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 respectively.

 

Menstrual 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 day of menstruation.

 

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: 

      • 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 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:

      • 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.

Indonesian Labour Law Act 13 of 2003 as amended by Law No. 11/2020 (Job Creation Law), 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.