INDONESIA Law and Practice Contributed by: Indra Setiawan, Ridzky Firmansyah Amin, Marintan Panjaitan and Tifanny Natalia, ABNR Counsellors at Law
An employee is considered part-time if the working hours are fewer than seven hours per day and 35 hours per week. Wages for part-time employees may be calculated on an hourly basis. Overtime work can only be performed at the request of the employer and with the employee’s consent, which must be provided in either hard copy or digital form. Employees may work a maximum of four hours of overtime per day and 18 hours per week. Employees subject to overtime work are entitled to receive overtime pay. The amount in overtime pay is based on hourly rates, calculated as 1/173 x monthly wages (basic salary and fixed allowance). In addi - tion to receiving overtime pay, employees must be given sufficient rest opportunities. If employees work overtime for four hours or more, they must also be provided with food and beverages totalling at least 1,400 kcal. The working hours that exceed the maximum daily and weekly limits are only applicable in specific sec - tors and for specific positions, including: • energy and mineral resources; • mining; • upstream oil and gas; • agribusiness and horticulture; and • fisheries. Exclusion from overtime pay exists for employees in roles such as thinker, planner, implementer or super - visor, whose work hours differ from those of other employees such that they receive a higher wage. These exempted positions must be clearly defined in the employment agreement, employee handbook or collective bargaining agreement. 1.4 Compensation Minimum wages vary between provinces and sectors of business, and only apply to employees who have been with a particular company for less than one year. The governor of a province stipulates minimum wag - es based on the suggestions and considerations of a wages council. The governor of a province may also set minimum wages for cities or regencies (districts) under their jurisdiction.
There is no mandatory 13th-month salary for employ - ees in the private sector. Further, incentives, bonuses or reimbursement of work facilities are based on an agreement between an employer and employee, as well as the employer’s policy. No government intervention takes place with respect to determining the procedure for and amount of com - pensation, pay increases, etc, apart from the minimum wage stipulation. These matters are left to the discre - tion of the employer and the terms agreed with the employee. Additionally, Indonesian employment law recognises a mandatory religious holiday allowance of one month’s wages for employees with 12 months of consecutive service. For those with service periods of one to 12 months, the allowance is paid pro rata. The allow - ance should be paid at least seven days before the relevant religious holiday (eg, Eid al-Fitr or Christmas, depending on the employee’s religion or the employ - er’s policy). 1.5 Other Employment Terms Employees are entitled to paid leave, as further explained in section 5.2 Sabbaticals . No specific regulations exist on confidentiality or non- disparagement under Indonesian employment law; the applicability depends on the agreement between an employer and employee. These obligations are commonly inserted and agreed under the employ - ment agreement or in a separate document (as the case may be). There is no specific limitation on employee liability under the law. Pursuant to the Indonesian Civil Code, employers are liable for losses or damage caused by their employees. However, under the employment law, employers may make a deduction of up to 50% from an employee’s salary to compensate for loss or dam - age suffered by the employer, subject to provisions in the employment agreement, employee handbook or collective bargaining agreement. The deduction can be made from the employee’s monthly wages until the loss or damage suffered by the employer is compen - sated for fully.
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