Leave Policy in Indonesia

Leave Policy in Indonesia
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When you’re building a global remote team, you get access to the best talent in the world. But there’s more to consider when working with and compensating your international employees. Paid leave can be a big challenge for international businesses. For example, if you’re hiring employees from Europe, prepare to be without them for extended periods, since some European countries offer generous paid leave.

If your team includes employees from Indonesia, you need to know about public holidays in Indonesia and other policies related to paid leave. Use this guide to learn everything you need to know about annual leave in Indonesia before you start recruiting.

Annual leave in Indonesia

All Indonesian employees get 12 days of paid time off once they have worked for you for 12 months. You can specify this leave in your policies and company regulations. Each employee has to take off one six-day period per year, and whatever they don’t use expires six months after they're issued the right to use the paid leave.

For Indonesian employees, a position is considered full-time if they work 40 hours per week in five or six days. But you can make exceptions for any work that can be done in fewer than seven hours a day or 35 hours a week.

You may also make exceptions if you offer flexible scheduling. As remote workers, your Indonesian team members can work from anywhere, so ask an employer of record about their specific scheduling policies to help ensure you’re compliant with all regulations.

When your Indonesian team is taking their allocated 12 days, you have to pay them 100% of their salary. You can choose to offer more than this per your company policy. If you do, make sure it’s clearly stated in your company policy.

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Holiday leave in Indonesia

Your policy should also consider national holidays in Indonesia. The country’s laws offer time off for public holidays. Indonesia recognizes 12 to 15 national holidays; dates vary by year. At the beginning of the year, or during onboarding, check in with your employer of record. In 2023, national holidays in Indonesia include:

  • New Year’s Day (January 1)
  • Lunar New Year (January 22)
  • Lunar New Year Holiday (January 23)
  • Isra Mi’raj (February 18)
  • Bali Hindu New Year (March 22)
  • Bali Hindu New Year Holiday (March 23)
  • Good Friday (April 7)
  • Lebaran Holiday (April 21)
  • Hari Raya Idul Fitri (April 22)
  • Lebaran Holiday (April 23 – 26)
  • Labour Day (May 1)
  • Ascension Day of Jesus Christ (May 18)
  • Pancasila Day (June 1)
  • Waisak Day Holiday (June 2)
  • Waisak Day (June 4)
  • Idul Adha (June 29)
  • Islamic New Year (July 19)
  • Independence Day (August 17)
  • Prophet Muhammed’s Birthday (September 28)
  • Christmas Day (December 25)
  • Christmas Holiday (December 26)

Many of these days aren’t mandatory unless an employee works for the government, but you can choose to offer them to your Indonesian employees. As shown above, when a public holiday falls during the weekend, the holiday is celebrated on the closest business day.

For Indonesian employees, you must offer a religious holiday allowance known as Tunjangan Hari Raya (THR) for religious holidays. THR is a bonus of one month’s salary for any employee who has worked for you for a year and a pro-rated amount for anyone who has worked for less than a year. THR needs to be paid one week before major religious holidays, Since the majority of Indonesians are Muslim, many companies distribute these payments around Eid al Fitr for Muslims, and Christmas day for non-Muslims.

When you’re hiring Indonesian employees, consider Islamic religious holidays in your project schedules and be prepared to answer questions during the onboarding process. A smaller percentage of Indonesians may be Catholic, Hindu, Buddhist, or other religions. When you’re using an employer of record in Indonesia, they can help you calculate your THR payments and figure out when to distribute them.

Other types of leave in Indonesia

Paid leave in Indonesia isn’t limited to holidays. Employees in the country are also entitled to the following types of paid time off:

Sick leave

Everyone gets sick, and your company probably offers employees paid time off to recover. For short-term sick leave, Indonesian workers can use some of their allocated 12 days of annual leave, although if you’re like many American employers, you may offer paid sick days in addition to allocated vacation days.

Long-term sick leave in Indonesia is also covered by labor laws. If an Indonesian employee has a doctor’s recommendation and needs to take sick leave, they are paid their full salary for the first four months of sick time. After four months, they are paid three-quarters of their salary for the next four months.

The rate changes to half the monthly salary for the following four months. If sick leave lasts longer than 12 months, you can pay an employee 25 percent of their salary until you find a replacement.

Maternity leave

Indonesia’s Manpower Law gives women three months of paid maternity leave at their full salary. A pregnant woman can take the leave six weeks before and six weeks after delivery or take the full three months after they give birth. Some companies will extend time off before delivery and still offer the full three months after the baby is born.

You can check with your employer of record to make sure your maternity leave policy aligns with local law. Or make a plan to replace an Indonesian team member three months after they have a baby.

Maternity leave in Indonesia also covers miscarriage. Women who experience a miscarriage are entitled to six weeks of paid leave to recover.

In 2022, members of parliament introduced a bill that would extend paid maternity leave to six months. While it has yet to pass, this is a development that could impact leave policies for your Indonesian employees in the coming years.

Paternity leave

Paternity leave in Indonesia is much shorter than maternity leave. Expectant fathers also get paid leave following a baby’s birth. Under Indonesian law, men can take off two days after a birth or a miscarriage. If they have a doctor’s note requiring additional leave for medical reasons, they can extend it to one month.

Family leave

If an Indonesian worker experiences a significant family event, they can receive paid leave based on circumstances. An employee’s wedding warrants three paid days off. They can take two days for their child’s baptism, two days for their child’s wedding, one day of bereavement following the death of a family member in the household, and two days of bereavement following the death of a spouse, parent, in-law, or spouse.

Indonesian labor law doesn’t offer a comparable policy for the Family Medical Leave Act which covers American employees who need to take time off to care for a family member. If your remote team member experiences a family emergency that requires long-term leave, you can likely use your own corporate policy.

Work-related injuries

Leave policy in Indonesia doesn’t cover work-related injuries. Many employers in the country refer to their insurance policies in these circumstances. If one of your remote team members experienced a work-related injury that took them out of commission, they would probably be covered over the country’s sick leave requirements with a doctor’s note. You would also need to refer to your insurance policy to determine compensation.

In this case, it’s best to keep all accident-related documents and go over onboarding paperwork with your employer of record.  

Other leave

You may require your employees to attend certain job-related training and development classes. Or they may be members of a union that requires a certain level of participation. Under Indonesian labor law, you are required to offer leave so your employees can attend training sessions and fulfill their union duties.

The country also observes Election Day as a national holiday so workers can vote. Election days are observed every five years, with the next scheduled for 2024. When you’re hiring and onboarding team members from Indonesia, check with your employer or record to determine the dates for elections.

Managing your Indonesian remote workers

Indonesian labor laws change regularly as the world continues to evolve, and keeping track can be tricky, especially when your remote team is global. Thankfully, you don’t have to follow Indonesian labor law on your own.

Using an employer of record like Skuad takes payroll and benefits off your plate. This solution lets you focus on assembling and developing your team while staying in compliance with local labor laws, including those related to annual leave in Indonesia.

We can also help you recruit the best talent in Indonesia to round out your team. You don’t have to worry about potential fines for not following labor laws. Our team will work with you to manage and pay your remote workers. We offer services for countries all over the world, and our network includes some of the best global tech talent.  

Let us help you fill out your team. If you want to access Indonesian talent without the hassle of human resources and payroll, contact us and request a demo today.

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