5 Employment Laws You Don’t Want to Break in Indonesia

If you want your company to sustain in Indonesia, never break these employment laws

Indonesia is a good country to start a business. It has a great business climate, welcoming customers, and a big opportunity. However, it doesn't mean that you can ignore the rules and do whatever you want to do to the employees.

You have to understand that there are rules that you have to obey. Otherwise, you may suffer from the consequences, from sanction to closing of your business.

In fact, you never want these things to happen to you. So, always understand the 5 Employment Law That You Don't want to break in Indonesia when you open the business:

1. Firing the employee for taking equitable leaves

According to The Indonesian Manpower Act No.13 of 2003, every employee who has worked for more than 1 year has annual leaves for 12 days. 

If you threaten to fire the employee who takes his right of annual leaves, the employee can sue you, and you may get the sanction from the Minister of Labor and Employment.

2. Not giving the Religious Holiday Allowance

The regulation of Religious Holiday Allowance/THR (Tunjangan Hari Raya) is mentioned in Indonesian Minister of Manpower Regulation No. 06/2016 March 8th, 2016. The Religious Holiday Allowance must be given to the employees who work morethan 1 month in a company.

The amount of the Religious Holiday Allowance for those who have worked for more than 12 months is the same as their monthly salaries.

3. Not giving the payment for working overtime

The ideal working hour in Indonesia is 40 hours a week, either the company applies 5 or 6 weekdays a week. So, on the condition that the employee must work over such duration, the company must pay their overtime per hour. And the limit of working overtime is not more than 3 hours a day.

If the employer resists to pay them, he can be charged with 1 until 12 months in prison or a fine of IDR 10 million to IDR 100 million.

4. Not giving the severance pay

If you fire a permanent employee for any reason, you must give them the severance pay as mentioned in the Indonesian Labor Law of 2003.

When a permanent employee didn't receive the severance pay, they can sue the company to the Industrial Relation Court. There is no chance that a company can make the rule not to give the severance pay for any reason because the agreement made by the companies in Indonesia cannot contradict the government law.

5. Hiring children

According to the act of 68,69, and 74 of The Indonesian Labor Law of 2003, employers are prohibited from hiring children. What is meant by the children here are the people below 18 years old. 

Actually, children of 13-15 years old are allowed to work, as long as the employer can meet these requirements.

•         The job is a light work

•         The parents or the guardians of the children give the permission

•         There must be a work agreement

•         The children can only work in the daytime, and it doesn't bother their studies

•         The employer must meet the safety and health requirements

•         There is a clear-cut employment relationship between the employer and the children/parents/guardians

•         The children must be paid

If you want to be more careful and make sure that you never break the law, either intentionally or not, never hesitate to look for legal advice.

BP LAWYERS CAN HELP YOU: WE CAN ASSIST YOU IN PROVIDING THE BEST SOLUTION TO THE LEGAL PROBLEM OF YOUR BUSINESS OR YOUR COMPANY’S. YOU CAN CONTACT US VIA ASK@BPLAWYERS.CO.ID OR +62 821 1000 4741