Manpower Minister Issues Circular on Religious Festivity Allowance for Workers, Laborers
Date 12 April 2021
Minister of Manpower Ida Fauziyah has issued Circular Number M/6/HK.04/IV/2021 on the 2021 Implementation of Religious Festivity Allowance (THR) Payment for Workers/Laborers in Companies.
The Circular is addressed to Governors throughout Indonesia.
“Providing religious festivity allowance is an obligation employers must carry out to their workers. THR for workers is an effort to fulfill the needs of workers and their families in celebrating religious holidays. Particularly, amidst this economic recovery, THR can certainly stimulate public consumption that will boost the economy,” the Minister said during a virtual press conference, Jakarta, Monday (12/4).
Under the Circular, the implementation of THR is based on Government Regulation Number 36 of 2021 on Wages and Regulation of Minister of Manpower Number 6 of 2016 on Religious Festivity Allowance for Workers/Laborers in Companies.
“I emphasize that the THR for workers must be paid no later than 7 days prior to the religious holidays,” Ida said.
As for the implementation, the THR payment is made to workers who have a continuous service period of 1 month or more. THR is also given to workers based on a work agreement for an unspecified period of time or a fixed-term work agreement.
For workers with a continuous service period of 12 months or more, THR will be given equivalent to one month’s salary. Meanwhile, for workers with one month service period continuously, but less than 12 months, THR will be given proportionally according to the calculation of working period divided by 12 months and multiplied by 1 month’s salary.
For workers who work based on a daily work agreement that has worked for 12 months or more, 1 month’s salary is calculated based on the average wages received during the last 12 months prior to religious holidays. Meanwhile, for workers who have worked for less than 12 months, 1 month’s salary is calculated based on the average wages received each month during the working period.
The Circular also states that companies affected by the COVID-19 pandemic and consequently unable to provide this year’s THR payment according to the time specified in the laws and regulations, Ida asked the governors and regents/mayors to seek solutions by requiring employers to discuss the issue with workers/laborers to reach an agreement amicably.
“The agreement is made in writing and contains the period of THR payment to be paid prior to the religious holiday,” Ida said.
Ida further said that the agreement regarding the period of THR payment must be ensured that it will not eliminate the obligation of employers to pay this year’s THR for workers in accordance with the provisions of laws and regulations.
“Companies that have made agreements with workers or laborers should report the results of the agreement to the agency that carries out regional governments affairs in the manpower sector,” she said.
On that occasion, Ida also urged companies to prove their inability to pay this year’s THR according to the time determined based on the company’s internal financial statements in a transparent manner.
In the meantime, in order to anticipate the emergence of complaints regarding the implementation of THR payment and the implementation of effective coordination between the Central Government and regional governments, the Minister asked the governor and regents/mayors to enforce the law in accordance with their authority regarding violations of the 2021 THR payment and take into account recommendations from the results of the inspection of the labor inspector.
Ida also urged the governor and regents/mayors to establish a Command Post for the Implementation of the 2021 Religious Festivity Allowance (Posko THR) while still adhering to strict health protocols to curb COVID-19 transmission.
“We also ask the governors and regents/mayors to report the data on the implementation of the 2021 THR in companies and the follow-up,” she said. (PR of Manpower Ministry/UN) (RIF/MUR)