- Indonesia’s Minister of Manpower (“Minister”), Ida Fauziyah, has just issued Circular No. M/6/HK.04/IV/2021 of 2021 on the Granting of the 2021 Religious Holiday Allowance to Employees/Laborers of Companies (“Circular 6/2021”), which mandates that the Religious Holiday Allowance (Tunjangan Hari Raya Keagamaan – “THR”) should be paid in full by employers to their workers by no later than seven days prior to the annual religious holiday of the workers concerned.
- Moreover, THR payments should be made to employees/laborers who are working under both unspecified work agreements and specified work agreements, provided that said employees/laborers have been working on a continuous basis for at least one month or longer. The amount of THR that should ultimately be paid should be based on the working periods of the relevant employees/laborers through the application of the following formulas: 1) A working period of 12 consecutive months or more should result in a THR payment amounting to one month’s salary; 2) A working period of between one and 12 months should result in a proportional THR payment that should be calculated by taking the relevant working period, dividing it by 12 months and then multiplying the result by one month’s salary.
- It should be noted that any employees/laborers who are employed under daily work agreements (“Daily Workers”) and who have been working for 12 months or longer should have their one month’s salary calculated based on the average salary received during the previous 12 months prior to the relevant religious holiday. Meanwhile, Daily Workers who have worked for fewer than 12 months should have their one month’s salary calculated based on the average salary received during each month of the relevant working period.
- Companies that are still being affected by the ongoing COVID-19 pandemic and that are consequently unable to make the mandated THR payments for 2021 in accordance with the specified timeframes are required to engage in dialogue with their employees/laborers as a part of efforts to reach an agreement. Any agreement that is ultimately reached regarding the timeframes for THR payments do not nullify the obligation of employers to pay the 2021 THR to their employees/laborers in accordance with the relevant laws and regulations. (SETKAB)
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