Indonesia

Global Compliance Guide

Labor Requirements

Labor standards are less comprehensive in Indonesia than in other, more centralized nations, and labor unrest is frequent. The central labor law is the Manpower Act of 2003. Other laws governing employment include the Trade Union Act of 2000 and the Industrial Relations Disputes Settlement Act of 2004.

Hours & Pay Regulations

Normal Working Hours

The duration working hour shall include, 7 hours in one day and 40 hours in one week in the case of the working period being 6  days in one week, and 8  hours in one day and 40 hours in one week in the case of the working periods being 5 days in one week. Manpower Act No. 13 of 2003, arts. 77, 79.

Overtime

Employers must pay employees overtime if they work:

      • More than 40 hours a week or more than eight hours per day in a five-day workweek; or
      • More than seven hours a day in a six-day workweek.

Employers must abide by the following rules regarding overtime:

        • The worker must consent to the requirement to work overtime;
        • The worker can only work overtime up to three hours per day or 14 hours per week; and
        • The employer must provide the employee with food and drink of at least 1,400 calories if the overtime work is carried out for three hours or more. This cannot be replaced with money.

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. Overtime work performed on weekly rest days of employees working six-day workweeks must be compensated at two times the normal wage for the first seven hours of overtime work, three times the normal wage for the eighth hour of overtime work, and four times the normal wage for the ninth and 10th hour of overtime work.

 

Overtime work completed on statutory holidays of employees working six days a week must be compensated with two times the normal hourly wage for the first five hours of work, three times the normal hourly wage for the sixth hour of work, and four times the hourly wage for the seventh and eighth hours of overtime work.

 

Overtime work performed by employees working five day workweeks on either a weekly rest day or a statutory holiday must be compensated at two times the normal hourly wage for the first eight hours of work, three times the normal hourly wage for the ninth hour of work, and four times the normal hourly wage for the 10th and 11th hour of work. Employees must agree to work overtime and may not work more than three hours of overtime in a day or 14 hours of overtime in a week. Manpower Act No. 13 of 2003, arts. 78, 85; Ministry of Manpower Decree on Overtime Hours and Wages, No. Kep.102/Men/VI/2004, art. 11.

Breaks

For every four hours worked, a 30-minute break is required and the rest time excludes working hour. Manpower Act No. 13 of 2003, arts. 77, 79.

Work On Rest Days

The law also requires one day of rest every week for those who work a six-day workweek and two days of rest for those with five-day workweeks.

 

Long-term rest at least 2 months and it is executed in the seventh and the eighth years respectively one month for workers/labor already working for 6 years continuously with the same company with the provision that the workers/labor no longer entitled to their annual rest in the 2 current years and it subsequently applies to every multiple of 6 years working period. The implementation of the annual rest time shall be regulated in working agreement, corporate rules or collective working agreement. Manpower Act No. 13 of 2003, arts. 77, 79.

Public Holidays

Public holidays in Indonesia are as follows:

      • 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
      • International Labor Day
      • Pancasila Day
      • Aug. 17: Independence Day
      • Idul Fitri (five days)
      • Idul Adha
      • Islamic New Year
      • Dec. 25: Christmas Day
      • Dec. 26

Workers cannot be required to work on holidays unless the nature of the job is such that work must be performed on these days, as determined by the minister of manpower. Employees who are required to work on a holiday must be paid twice their normal wage.

 

Holidays that occur on a weekend are not moved to another date. Ministry of Human Development and Culture, National Holidays 2017 (Indonesian); Ministry of Manpower Decree on Overtime Hours and Wages, No. Kep.102/Men/VI/2004, art. 11 (Indonesian).

Annual Leave

Workers are entitled to 12 days of paid annual leave after they have worked for 12 consecutive months. At least six days of this leave must be taken consecutively. In some companies, employees who have been with the employer for six consecutive years get one month of paid leave in each of the next two years. This long break is available every six years the worker has been with the company. Annual leave must be taken within six months of its accrual. Manpower Act No. 13 of 2003, arts. 79, 84.

Minimum Wage

Indonesia has no national minimum wage. Area wage councils determine minimums for different parts of the country. The minimum monthly wage ranges from a low of 1.570 million rupiah in Yogyakarta to 3.940 million rupiah in Jakarta.

Special Leave

Sick Leave

Employers are required to compensate employees absent from work due to illness provided the employee submits the medical certification. For the first four months, compensation must be at 100 percent of wages; for the second four, 75 percent; the third four, 50 percent; and subsequent months, 25 percent. After 12 months’ absence due to illness, the employer can fire the employee. Female employees are entitled to two days’ menstruation leave if they are unable to work. Manpower Act No. 13 of 2003, arts. 81, 93(3).

Maternity Leave

Female workers have the right to employer-paid maternity leave 11/2 months before and 11/2 months after giving birth. A worker who suffers a miscarriage may also take 11/2 months of paid leave.

 

These periods of leave can be extended if the need is attested to by an obstetrician or midwife. Workers who take leave must be reinstated to the same position in the same workplace upon return to employment. If a female worker is pregnant and/or breast-feeding, she may not be required to perform work that endangers her health or that of her child. Termination on the basis of marriage, pregnancy or childbirth is illegal. Female workers/labor still breastfeeding their baby shall be given adequate opportunity to breastfeed their baby if it is to be upon the working hour. Manpower Act No. 13 of 2003, arts. 76, 82, 153,

Menstruation Leave

Female worker/labor in the menstruation period that feels sick and notify the condition to entrepreneurship shall not oblige to work in the first and second days of the menstruation period. The implementation of this provision shall be regulated in working agreement, corporate rules or collective labor agreement.

Paternity Leave

A male employee is entitled to two days’ employer-paid leave following the birth of a child or his wife’s miscarriage. Manpower Act No. 13 of 2003, art. 93(4)(e).

Other Leaves

Workers are entitled to paid leave in the following circumstances:

    • Wedding (three days);
    • Birth of child/paternity leave (two days);
    • Children’s wedding (two days);
    • Son’s circumcision (two days);
    • Child’s baptism (two days);
    • Wife’s miscarriage (two days);
    • Death of a spouse, child, child-in-law, parent or parent-in-law (two days);
    • Death of another member of a worker’s household (one day);
    • State obligations;
    • Religious obligations; and
    • Trade union activities with the permission of the employer.

 Manpower Act No. 13 of 2003, art. 93(4).

Last updated on: August 21st, 2019