In response to concerns on the ability of companies to pay their employees their legally due religious holiday allowance (Tunjangan Hari Raya or THR) due to the economic impact of the COVID-19 pandemic, the Indonesian govt. has issued a circular that allows companies to pay the THR in installments or later under certain conditions.
In consideration of the current economic conditions in Indonesia during the COVID-19 pandemic, which has had an impact on business continuity, as well as in considering the workers/laborers鈥� needs in regards to the payment of the Religious Holiday Allowance (Tunjangan Hari Raya&苍产蝉辫;辞谤&苍产蝉辫;鈥�THR鈥�), the government has decided to arbitrate an understanding between the employers and workers/laborers on this matter.
Therefore, on May 6, 2020, the Ministry of Manpower issued Circular of the Minister of Manpower No. M/6/HI.00.01/V/2020 on the Implementation of the Granting of Religious Holiday Allowance in Companies during the COVID-19 Pandemic (鈥�Circular 6/2020鈥�).
Through this circular, the Minister of Manpower urges all Governors to ensure companies operating in their respective provinces to grant THR for their employees as prevailed in the relevant laws and regulations.
However, if companies are unable to grant a THR in due time, said companies must carry out a deliberation with their employees, which is based on transparent company financial statements and good faith to agree on the following matters:
- THR payment will be given gradually, if the companies are unable to grant a full THR in due time;
- If the companies are totally unable to grant a THR in due time, THR payment will be postponed and must be provided at another time as per agreement between the companies and their employees; and
- The period and method of imposing fines for delayed THR payment.
Furthermore, companies must report the agreements reached between the companies and their employees as stated above to the agency of manpower (dinas ketenagakerjaan) in their respective provinces.
It should be noted that the agreements regarding the period and method for the payment of THR and fines do not eliminate the obligation of employers to pay THR and fines to their employees in accordance with prevailing regulations, and that the THR must be paid within 2020.