Indonesia's Working Hours and Overtime Regulations

If you're hiring employees in Indonesia, it's important to know the overtime rules. These rules set limits on extra hours worked, ensuring fairness and compliance with the law.

According to Government Regulation No. 35 of 2021 in Indonesia, overtime is limited to a maximum of 4 hours per day and 18 hours per week. This regulation aims to prevent employee exploitation by setting clear limits on overtime work.

For a detailed discussion on definitions, rules, and types of overtime, continue reading the article below!

The calculation of overtime is in accordance with the rules in the Decree of the Minister of Manpower and Transmigration of the Republic of Indonesia No. 102 of 2004 Article 1 paragraph 1, which defines overtime work as follows:

• Work exceeding 8 hours per day and 40 hours per week in 5 working days

• Work exceeding 7 hours per day and 40 hours per week in 6 working days

• Work on weekly rest days (Saturday/Sunday) or national holidays

Furthermore, it is specified that working overtime daily and without any time constraints is not allowed. This is further detailed in Article 3, which states that overtime work can only be performed for a maximum of 3 hours per day and 14 hours per week. The provisions regarding overtime do not include work performed on weekly rest days or official holidays.

Typically, companies and employees must first agree in writing through an assignment letter or overtime order signed by both parties. However, it should be noted that these calculation rules do not apply to all businesses.

Certain sectors, such as mining and energy companies, often use non-standard working hours, such as daily working hours. These companies will determine their own rules for working hours and rest periods, especially for field employees.

Generally, overtime work is divided into two types, for more clarity, see the following explanations:

Overtime on Working Days

The first type of overtime is on working days. During this time, employees are entitled to receive 1.5 times the regular wage for the first hour and 2 times for subsequent hours.

Overtime on Weekends or Public Holidays

The next type of overtime is on rest days or public holidays. The rules for overtime during this time are as follows:

• 5 Working Days: If the company operates 5 days a week, the overtime calculation is 2 times the hourly wage for the first 8 hours, 3 times for the 9th hour, and 4 times for the 10th and 11th hours.

• 6 Working Days: If the company operates 6 days a week, the overtime calculation is 2 times the hourly wage for the first 7 hours, 3 times for the 8th hour, and 4 times for the 9th and 10th hours.

Employee availability to work on holidays is considered overtime, where they earn higher wages than usual. However, before receiving their pay, how is overtime calculated when employees work on holidays?

Essentially, overtime pay calculations vary depending on the conditions, such as weekends, national holidays, and major religious holidays. To clarify, refer to the following formula and conditions:

Overtime pay rules for employees are as follows:

• For the first overtime hour, they receive 1.5 times the hourly wage.

• For each subsequent overtime hour, they receive double the hourly wage.

If overtime is worked on weekends or official holidays

Based on a 6-day workweek and 40-hour workweek, the overtime pay formula is as follows:

• Hours one through seven are paid at double the hourly wage.

• The eighth hour is paid at triple the hourly wage.

• For the ninth, tenth, and eleventh hours, they are paid quadruple the hourly wage.

If an official holiday falls on the shortest workday

Overtime pay is calculated as follows:

• Hours one through five are paid at double the hourly wage.

• The sixth hour is paid at triple the hourly wage.

• For the seventh, eighth, and ninth hours, they are paid quadruple the hourly wage.

If overtime is worked on weekends or official holidays

Based on a 5-day workweek and 40-hour workweek, the overtime pay calculation is:

• Hours one through eight are paid at double the hourly wage.

• The ninth hour is paid at triple the hourly wage.

• Hours ten, eleven, and twelve are paid quadruple the hourly wage.

Overtime is calculated when employees work more than thirty minutes beyond their regular work hours. If they work less than thirty minutes of overtime, those hours won't count towards their overtime pay.

To help you understand how to calculate overtime pay, here are examples of calculating employee overtime costs:

Calculating Overtime Costs on Rest Days or Holidays

Alexa works 7 hours a day or 40 hours a week for 6 days. Her monthly salary is Rp 3,000,000, including basic salary, fixed allowances, and variable allowances. Monday is a holiday, and Alexa was asked to work overtime for 7 hours. So, Alexa overtime pay is as follows:

*The monthly salary includes basic salary, fixed allowances, and variable allowances. Hence, the monthly salary used is 75%.

Monthly salary = 75% x Rp 3,000,000 = Rp 2,250,000

Overtime cost = 2 x 1/173 x 7 hours x Rp 2,250,000 = Rp 182,080

Therefore, Alexa's overtime pay is Rp 182,080.

Referring to Article 32 paragraph (1) of Government Regulation No. 35/2021 which states that the calculation of overtime pay is based on monthly wages, it can be interpreted that overtime pay is paid together with the monthly wage payment.

To ensure clarity, it is advisable to specify the timing of overtime pay in the company regulations, employment agreements, or collective agreements applicable within the company.

If a company violates the overtime conditions outlined in Article 78(1) of the Omnibus Law No. 11/2020, which requires consent from employees for overtime work, they may face criminal penalties ranging from a minimum fine of Rp. 5,000,000 (five million Indonesian Rupiah) to a maximum of Rp. 50,000,000 (fifty million Indonesian Rupiah). Such violations are considered criminal offenses.

Additionally, if a company fails to comply with the requirement to provide meals and beverages during overtime lasting 4 hours or more, as per Article 61(1) of Government Regulation No. 35 of 2021, they could be subject to administrative sanctions including:

• Written warnings

• Restrictions on business activities

• Temporary suspension of part or all production facilities or even business operations being temporarily halted

How much is overtime paid for 1 hour?

For the first overtime hour, it's 1.5 times the hourly wage; and for every subsequent overtime hour, it's 2 times the hourly wage.

Can overtime exceed 4 hours per day?

Overtime is also regulated in Regulation 13/2003, specifically in Article 78. This article was later adjusted in the Omnibus Law. Here are the rules:

• Overtime work can last up to 4 hours per day and 18 hours per week.

• If overtime is necessary, the employee must agree to it.

Does 30 minutes count as overtime?

Typically, overtime is only counted as work hours outside the office if it exceeds 30 minutes. If it's only 20 or 30 minutes, the company is not obliged to pay additional wages.

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