How is company's obligation to pay Religious Holiday Allowance based on Circular from Ministry of Manpower No. M/67/HI.00.0-1/V/2020 during COVID-19 Pandemic

The Ministry of Manpower has issued Circular No. M/67/HI.00.0-1/V/2020 on the Hand out of Religious Holiday Allowance (“THR”) for 2020 at Companies during the COVID-19 Pandemic. The Circular stipulates that Governors should ensure that:

1. Ensure that companies pay religious THR to workers/laborers in accordance with laws and regulations;
2. In case the company is unable to pay the Religious THR at the time specified in accordance with laws and regulations, the solution to the problem should be obtained through a process of dialogue between employers and workers/laborers. The dialogue process is carried out amicably, based on transparent company internal financial statements and good faith to reach an agreement. The dialogue can agree on several things, including:
   1. If the company is unable to pay the full THR at the time determined in accordance with laws and regulations, the THR payment can be made in stages;
   2. If the company is unable to pay the THR at all the time specified in accordance with the provisions of laws and regulations, the payment of the THR can be delayed until a certain period of time being agreed upon;
   3. The time and method of imposing fines for late payment of religious THR.
   4. Agreement between the employer and the worker/laborer as mentioned in number 2 is reported by the company to the Services which carries out government affairs in the field of local manpower.
   5. Agreement on the time and method of payment of Religious THR and fines does not eliminate the obligation of employers to pay Religious THR and fines to workers/laborers in the amount in accordance with laws and regulations, and to pay them in 2020.

This Circular was issued on May 6, 2020.

Should you have any questions on the matter above, or other subject you wish to inquire, please do not hesitate to email us at fwp@cbn.net.id

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