Employers must still pay religious holiday allowance (THR) to employees in full or face fines and the suspension of business activities. Payments of THR can be no later than one week before the start of the religious holiday.
Recognized holidays include:
- Eid-il-Fitri for Muslims
- Christmas for Catholics and Protestants (considered as two different religions in Indonesia)
- Nyepi for Hindus
- Vesak for Buddhists
- Chinese New Year for Confucianists
Employers unable to pay the THR must prove their inability to pay by providing transparent financial evidence to the local government. If this is approved, the company is still obliged to pay the THR either one day before the start of the religious holiday or later, depending on the negotiations between the related parties.
Fines for non-compliance
The regulation reiterates that businesses who fail to pay the THR will be fined 5% of the THR amount, which will be used for the employees’ welfare. Further, this sanction does not waiver the employer’s obligation to pay the THR.
In addition to financial sanctions, employers will be subject to administrative sanctions for failure to pay the THR.
These are:
- Restriction of business activities
- Permanent or temporary suspension of production facilities
- Suspension of business activities.
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