New Provisions on Religious-Holiday Allowance

The Minister of Employment (“Minister”) has issued Regulation No. 6 of 2016 on Religious-Holiday Allowance for Employees (“2016 Regulation”).The 2016 Regulation redefines provisions on religious-holiday allowance (Tunjangan Hari Raya– “THR”), encompassing: payment of THR by employers, amounts of payable THR, and sanctions for non-compliance. Previously, these matters were regulated under Ministerial Regulation No. PER.04/MEN/1994 (“1994 Regulation”).The 2016 Regulation is of relevance to both domestic and international employers and employees, whether they are individuals, partnerships or legal entities, as well as to the general public.THR ObligationThe 2016 Regulation mandates that all employers have to make THR payments to any employees who have worked for them for a period of at least one month, regardless of whether the employee was recruited on a permanent or temporary basis. THR is to be paid once a year within a maximum of seven days of a given religious holiday (collectively referred to as “Religious Holidays”) as follows: [1]