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As for the sanctions, Ida explained that companies that fail to pay the holiday allowance seven
days before the religious day will be subject to administrative sanctions based on Government
Regulation No. 36/2021 on wages.

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"The administrative sanctions are in the form of written warnings, restrictions on business
activities, temporary suspension of part or all of the means of production, and freezing of
business activities," Ida added.

Despite the unprecedented economic uncertainty amid the Covid-19, the government previously
required employers to pay holiday allowance for their employees in full, not in installments. This
was mentioned in the recent Manpower Ministry circular M/6/HK.04/IV/2021, considering the
government's various forms of support to entrepreneurs to overcome the economic impact of
Covid-19.

The new regulation was based on discussions with the national tripartite cooperation institution,
the National Wage Council working group, as well as building intense communication with
employers, trade unions and labor unions on the religious holiday allowance in 2021.

Even so, for employers who cannot fulfill the obligation within the time specified in the statutory
regulations, Ida called on the governor and regent or mayor to conduct a dialog between
employers and workers to reach an agreement.

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agreement must be in writing and state the date for the payment of the holiday allowance. It
must be paid no later than the religious day observed by the worker," Ida asserted.

"Companies that make agreements with workers or laborers should report the results of the
agreement to the local government agency in charge of manpower affairs," she added.

Ida also asked the company to prove the inability to pay holiday allowance based on the
company's internal financial statements in a transparent manner.

Also read : Students, Workers Stage Protest Anew over Indonesias Jobs Law However, if the
company is still unable to pay the holiday allowance under the applicable regulations, the
company will be fined.

To supervise the company's compliance, the Ministry of Manpower has formed a Task Force for
Consultation and Law Enforcement Services for the Implementation of Holiday Allowance

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