Apr

21

Religious Holiday Allowance 2021

On 12 April 2021, Minister of Employment, Ms.Ida Fauziyah, issued a Circular Letter Number M/6/HK.04/IV/2021 concerning the Implementation of Religious Holiday Allowance 2021 for Workers in the Company (“Circular Letter 6/2021”), addressed to governors throughout Indonesia. The provision of Religious Holiday Allowance (i.e., Tunjangan Hari Raya or as it is commonly known “THR“) for workers is an effort to meet the needs of workers and their families for celebrating religious holidays. The Indonesian Government is officially requiring state-owned and private corporations to fully disburse employees THR payments, or Muslim holiday allowance, in order to boost public consumption ahead of Ramadan and the Eid al-Fitr in May 2021.

THR is a mandatory benefit that must be provided to all employees in conjunction with the religious holiday observed by the employee (based on the employee’s religion). Based on Government Regulation No. 36 of 2021 on Wages and Minister of Employment Regulation No. 6 of 2016 on Religious Holiday Allowance for Employees in Companies, THR is an obligation that must be carried out by employers to employees. THR is implemented by paying attention to several things, among others:
  1. All employees who have worked continuously for one month or more are entitled to THR; and
  2. All employees (i.e., both definite and indefinite period employees) are entitled to THR.
Circular Letter 6/2021 stipulates THR 2021 payment provisions, among others:
  1. THR must be paid no later than 7 (seven) days before the religious holiday.
  2. All employers are now obliged to provide THR to employees who have worked continuously for one month or more. The amount of THR to be paid is based on the employee’s service period as follows:
    • An employee with a service period of 12 continuous months or more is entitled to THR in an amount equal to one month’s salary.
    • An employee with a service period of one month or more but less than 12 months is entitled to a prorated amount of THR calculated using the following formula:
  3. service period removebg preview
  4. For daily freelance workers, the one month’s salary is determined as follows:
    • For those who have worked for 12 months continuously or more, the one month’s salary is calculated based on the average salary for the past 12 months.
    • For those who have worked for less than 12 months, the one month’s salary is calculated based on the average salary received each month during employment.
THR Provision for companies still affected by the Covid-19 pandemic

Circular Letter 6/2021 stipulated that companies that are still affected by the Covid-19 pandemic and result in not being able to provide the THR in 2021 according to the specified time shall have a dialogue with their employees.

Minister of Employment, Ida Fauziyah, ask the Governor and Regent/Mayor to provide solutions by requiring employers to have a dialogue with their employees to reach an agreement implemented in a familial manner and in good faith. The agreement is made in writing and contains the time of payment of THR with the condition that it is paid at the latest until before the concerned Religious Holidays in 2021.

The agreement on the timing of THR payments must be ensured so as not to eliminate the obligation of employers to pay the THR in 2021 to their employees with the amount in accordance with the applicable law and regulations. The Government has asked the companies to prove the inability to pay the THR in 2021 according to the specified time, based on the company’s internal financial statements transparently. Companies that do deals with employees shall report the results of the agreement to the local government affairs that organizes employment.

Meanwhile, the Governor and Regent/Mayor shall enforce the law under their authority against violations of the provision of THR in 2021 by paying attention to the recommendations of the examination result of the employment supervisor. The Governor and Regent/Mayor are also asked to establish a Command Post for the Implementation of Religious Holiday Allowance 2021 (Posko THR) while paying attention to health protocols for preventing the transmission of Covid-19.

Employers who do not provide THR for their employees will be subject to the administrative sanctions under prevailing laws and regulations, which may be in the following forms:

  • Written warning;
  • Restriction of business activities;
  • Temporary or permanent suspension of some or all production facilities;
  • Suspension of business activities.

Apart from the THR, many more intricacies are involved in the employment laws which are not mentioned in this article. Should you need to have a legal consultation related to employment regulations in Indonesia, please do not hesitate to contact us or drop us an email at info@schinderlawfirm.com.

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Dear valued Visitor,

Data is a valuable currency in this new world. In the midst of digital transformation, the Indonesian government has taken the final decision to pass the Pelindungan Data Pribadi (PDP) Bill by September 2022. The PDP Law applies to all businesses established in Indonesia and puts the consumer in control. The task of complying with this regulation falls upon businesses.

The PDP Law affects a variety of business operations, including how your sales team prospect and how marketing initiatives are managed. Businesses have had to reassess their business procedures, applications, and forms. Additionally, all businesses that work with personal data should designate a Data Protection Officer (DPO) or data controller to oversee PDP compliance.

In line with this spirit, it gives us great pleasure to announce and share with all our esteemed clients and business associates that Schinder Law Firm is prepared to assist your company to understand the impacts of the Personal Data Protection Law (PDPL) and take the required measures to comply with the law. Our Privacy, Data Protection, and Cybersecurity practice group is a pioneer in providing data privacy law services in Indonesia. Personal data protection services include but are not limited to:

  • Assessing the existing systems, processes, and controls, etc.
  • Providing provide gap assessment on the existing systems, processes, and controls, etc.
  • Developing and ensuring contracts and agreements comply with the PDP Law
  • Developing policies, best practices, and procedures
  • Advising on the security of personal data and managing data breaches
  • Acting as the Data Protection Officer (DPO) and advising upon the appointment, role, and responsibilities of a data protection officer
  • Advising on cross-border transfers of personal data
  • Carrying out data protection impact assessments and data protection audits
  • Recommending other necessary corrective actions in order to comply with the PDP Law
  • Training on the PDP Law tailored to clients’ businesses

We look forward to many more opportunities in the year ahead with your continued support and trust. For consultation, please send us a WhatsApp or Email.

Warmest regards,
Naz Schinder
Managing Partner

Keep Up with the New Law in Indonesia: Personal Data Protection

  • Assessing the existing systems, processes and controls, etc.
  • Providing provide gap assessment on the existing systems, processes and controls, etc.
  • Developing and ensuring contracts and agreements comply with the PDPL.
  • Developing policies, best practices and procedures.
  • Advising on security of personal data and managing data breaches.
  • Acting as the Data Protection Officer (DPO) and advising upon the appointment, role and responsibilities of a data protection officer.
  • Advising on cross-border transfers of personal data.
  • Carrying out data protection impact assessments and data protection audits.
  • Recommending other necessary corrective actions in order to comply with the PDPL.
  • Training on the PDPL tailored to clients’ businesses.
Privacy, Data Protection and Cyber Security
We help our clients to understand the impact of the Personal Data Protection Law (PDPL) on their companies and take the required measures to comply with the law.