TAXES
LAW
7
Religious Holiday Allowance
Luther LLP in collaboration
with Maqdir Ismail & Partners
Indonesia is a multi-ethnic and multi-religious nation in which most
of the relevant celebrations observed by major religions are national
holidays. Labor regulations meanwhile provide a clear guidance on
employers’ obligations and employee’s rights in terms of calculation
and timing of religious holiday allowances.
According to Ministry of Manpower Regulation 6/2016 (MOM
6/2016), which revoked and replaced the preceding regulation from
1994, permanent and temporary as well as freelance employees
are entitled to a religious holiday allowance, provided they fulfil the
entitlement threshold. This means the employee must have been
employed at least for 1 full month (previously 3 months). Permanent
employees who are terminated less than 30 days prior to the
relevant holiday are entitled to receive an allowance. The allowance
is one monthly salary for employees with a tenure of 12 or more
months and it is to be pro-rated for employees with a tenure below
12 months. Since freelance employees receive no fixed salary, the
allowance amount is calculated based on the average monthly
remuneration during the past 12 months or less in cases of a lesser
tenure.
MOM 6/2017 clearly states that higher allowances may result from
individual employment contracts or collective labor agreements as
well as company regulations such as employee handbooks etc.
The far more relevant point in this regard however is that the
entitlement to a higher allowance amountmay result fromcustomary
practices in determining the allowance amount. This means that
even in the absence of any written guidelines, employees may be
able to argue that their allowance has always been calculated to
exceed statutory minimums in a certain way. Unfortunately MOM
6/2016 does not include any guiding on the aspects that would
constitute a customary practice in this sense.
The allowance is payable at least 7 days before the relevant
holiday which is Idul Fitri (Eid Al-Fitr) for Muslims, Christmas Day
for Christians; Seclusion Day (Nyepi) for Hindus; Vesak Day for
Buddhists and Chinese New Year’s Day for Confucians. For any
other religions, the relevant holiday may be agreed upon between
employer and employee.
Luther LLP is one of the largest continental European lawfirms in
Singapore. With our further lawfirms in Yangon and Shanghai as well
as our corporate services offices in Kuala Lumpur, Delhi-Gurgaon,
Shanghai and Singapore, we offer a comprehensive range of services
to our clients. In Indonesia we have formed a strong collaboration with
Maqdir Ismail & Partners in order to service our clients in their ventures
in this interesting market. Maqdir Ismail & Partners are highly regarded
for their expertise particularly in litigation, corporate law as well as in
mergers and acquisitions.
Luther LLP
4 Battery Road
Bank of China Building #25-01
Singapore 049908
Phone : +65 640 88000
Fax : +65 640 88001
Email
:
Maqdir Ismail & Partners
Jl. Latuharhary No. 6A
Menteng, Jakarta Pusat 10310
Indonesia
Phone: : +62213911191
Fax:
: +62213147502
Email:
:
Philipp Kersting
Senior Associate
+60 321 6600 85
Labor
