The Omnibus Law Sets the Amount of Labor Severance Payment

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JAKARTA - The government regulates severance payment for workers who experience Termination of Work (PHK) in the Draft Omnibus Work Copyright Law,

Based on article 156 of the Draft Omnibus Law on Employment Copyright that is given to the Indonesian Parliament, it is stated that the employer is required to pay severance payment and / or work service awards when terminating employment.

Section 157 of the Bill also explains the wage component used as a basis for calculating severance pay and workmanship awards consisting of basic wages and fixed benefits provided by workers / laborers and their families.

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The amount of severance pay and appreciation for years of service depends on the length of time the worker is concerned.

The following are the provisions for severance pay in the Working Copy Bill:

• work period of less than 1 (one) year, 1 (one) month of salary;
• work period of 1 (one) year or more but less than 2 (two) years, 2 (two) months of salary
• work period of 2 (two) years or more but less than 3 (three) years, 3 (three) months of salary
• work period of 3 (three) years or more but less than 4 (four) years, 4 (four) months of salary
• work period of 4 (four) years or more but less than 5 (five) years, 5 (five) months of salary
• work period of 5 (five) years or more, but less than 6 (six) years, 6 (six) months of salary
• work period of 6 (six) years or more but less than 7 (seven) years, 7 (seven) months of salary;
• work period of 7 (seven) years or more but less than 8 (eight) years, 8 (eight) months of salary
• work period of 8 (eight) years or more, 9 (nine) months of salary.

Work Period awards:

1. work period of 3 (three) years or more but less than 6 (six) years, 2 (two) months of salary;
2. work period of 6 (six) years or more but less than 9 (nine) years, 3 (three) months of salary;
3. work period of 9 (nine) years or more but less than 12 (twelve) years, 4 (four) months of salary;
4. work period of 12 (twelve) years or more but less than 15 (fifteen) years, 5 (five) months of salary;
5. working period of 15 (fifteen) years or more but less than 18 (eighteen) years, 6 (six) months of salary;
6. work period of 18 (eighteen) years or more but less than 21 (twenty one) years, 7 (seven) months of salary;
7. work period of 21 (twenty one) years or more, 8 (eight) months of salary

 

As for the difference in the Manpower Act, money for reimbursement of rights is no longer regulated by the government. The reimbursement of rights in the Work Cipta Bill is based on a multiple agreement between the employee and the employer through a work agreement, company regulations, or collective labor agreement.

While in the Manpower Act, the government regulates the replacement of rights that should be received by workers which includes annual leave that has not been taken and has not yet fallen, the cost or return costs for workers / laborers and their families to the place where workers / laborers are accepted to work.

Furthermore, housing replacement and medication and care are set at 15 percent of severance pay and / or years of service appreciation for those who fulfill the conditions and other matters stipulated in the work agreement, company regulations or collective work agreements. ***

NEWS24XX.COM/MIA