Minister of Manpower Issues Circular on 2023 Religious Festivity Allowance

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation     Date 28 Maret 2023
Category: News
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Minister of Manpower Ida Fauziyah has issued Circular Number M/2/HK.04.00/III/2023 on the Implementation of 2023 Religious Festivity Allowance (THR) Payment for Workers/Laborers in Companies dated March 27, 2023, which is addressed to governors throughout Indonesia.

The Minister said that the THR payment is an obligation that must be carried out by the companies to the workers/laborers by paying in full and no later than seven days prior to the religious holidays.

“The THR must be paid in full and could not be paid in installments. I ordered the company to comply with this provision,” said Ida in the virtualPress Conference on the 2023 THR Payment Regulations, Tuesday (03/28).

Ida explained that the THR will be given to workers/laborers with at least one month service period continuously, based on a work agreement for an unspecified period of time (PKWTT) or a fixed-term work agreement (PKWT), including daily workers/laborers that fulfill the requirementsbased on provisions of laws and regulations.

For workers/laborers with a continuous service period of 12 months or more, the THR amount will be equal to one-month salary. Meanwhile, for workers/laborers with one month service period continuously, but less than 12 months, the THR will be given proportionally.

Furthermore, concerning the amount of the THR, the Minister said that the companies are allowed to give more than the amount regulated. The Regulation of the Minister of Manpower (Permenaker) Number 6 of 2016 has stipulated that a company with a work agreement (PK), regulation of the company (PP), joint work agreement (PKB), or the prevailing practice applicable in the company that has agreed to give a better amount of THR than the amount regulated, then the THR given is in accordance with PK, PP, and PKB, or the prevailing practice.

For daily workers/laborers have a work period of 12 months or more, the one month’s salary is calculated based on the average wages received during the last 12 months prior to religious holidays.

For daily workers/laborers with less than 12 months service period, the one-month salary is estimated based on the average wage per month during the work period.

The circular also mentioned about the calculation of one-month salary for workers/laborers paid based on the agreed output. The one-month salary will be calculated based on the average wage within the last 12 months prior to the religious festivity.

Ida further explained that the important thing related to the basis for calculating THR using wages is that for export-oriented labor-intensive industrial companies that carry out adjustments to working time and wages as stipulated in the Regulation of the Minister of Manpower (Permenaker) Number 5 of 2023, then the companies are still required to pay the THR. The wage used as the basis for calculating THR is the last wage value before the wage adjustment is made.

“It needs to be highlighted because THR and other rights besides wages are not included in the part that may be adjusted by the Regulation of the Permenaker Number 5 of 2023,” she said.

In a bid to ensure smooth payment of 2023 THR for workers/laborers, Ida asked governors and officials to encourage companies in the provinces and regencies/cities to pay the THR in accordance with statutory provisions, and the companies should pay the THR earlier before the maturity date.

In addition, each province and regency/city will have a task force command post to anticipate complaints regarding the implementation of THR payment which is integrated through the website (UN)(FKH/AW/LW)

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