As Eid al-Fitr approaches, PDAEXSEA hereby solemnly reminds all Chinese companies in Indonesia to pay attention to and strictly abide by the relevant regulations of the Indonesian government on the issuance of religious holiday allowances (Tunjangan Hari Raya, referred to as THR), and ensure that this important benefit is paid to your employees on time and in full.
01
The legal basis and importance of THR
For Muslim employees, this is usually paid before Eid al-Fitr.
This allowance is not only a statutory right of employees, but also an important manifestation of enterprises fulfilling their social responsibilities and safeguarding the rights and interests of employees. The timely and full payment of THR will help improve employee satisfaction and loyalty and promote the stable development of enterprises.
02
THR issuance requirements
(1) Applicable objects:
All employees working in the private sector, as long as they have worked continuously for at least one month, whether they are employees of an indefinite contract or a fixed-term contract, are eligible for THR. This includes daily wage workers and piece-rate workers, as long as they meet the legal requirements.
(2) Payment time:
THR must be paid no more than seven days before Eid al-Fitr. Companies cannot pay in installments and must pay the full amount at one time.
(3) Amount calculation:
For employees who have worked continuously for 12 months or more, THR is one month's salary.
For employees who have worked continuously for less than 12 months, THR will be calculated in proportion to their working time.
(4) Government supervision and complaint handling
On April 1, 2024, two people filed a complaint against the Eid al-Fitr bonus position operated by the Tangerang Manpower Agency. Source: Jakarta Post
03
What will happen if the company fails to pay THR?
According to Government Regulation No. 36 of 2021 on wages, non-compliant companies may be subject to the following penalties:
Fines: If the employer fails to pay by the payment deadline (seven days before Hari Raya), a fine of 5% of the total THR payable will be imposed.
Work restrictions: Authorities may temporarily suspend the company's business or freeze certain operations of the company until THR obligations are fulfilled.
04 Pay special attention to the requirements of the new policy for specific industries
Manpower Minister Yasri issued a circular instructing ride-hailing and delivery companies to pay Eid al-Fitr subsidies in cash. According to the instruction:
Drivers with good performance and high productivity should receive a bonus equivalent to 20% of their average monthly net income in the past 12 months.
Other drivers should also receive a bonus, the specific amount depends on the company's financial capabilities.
Payment must be made no more than seven days before Eid al-Fitr.
The introduction of this policy, which aims to extend economic relief to gig workers who traditionally do not enjoy THR, reflects the government's care and protection for all types of workers.
At the same time, good labor-capital relations are also an important foundation for the sustainable development of enterprises.
PDAEXSEA recommends that all Chinese companies in Indonesia attach great importance to this matter and ensure that your employees can receive the holiday allowances they deserve on time to build a harmonious and stable labor relationship.
Finally, I wish all Chinese companies in Indonesia to flourish and achieve long-term performance!
PDAEXSEA, a one-stop cross-border enterprise service platform, tailors overseas solutions and supporting landing services for Chinese companies to help Chinese companies go overseas "less pitfalls".
For more services related to enterprises going overseas to Indonesia, please consult PDAEXSEA professional consultants.
