In the realm of professional recruitment and employment, employers must possess a thorough knowledge of salary delay regulations, especially in cases where employees choose to resign from their jobs.
Indonesia’s Manpower Law No. 13 of 2003 specifies that delaying an employee’s salary without a valid reason constitutes a breach of their rights, exposing the company to potential legal penalties.
As a job agency in Indonesia, we provide you with this more detailed understanding of the legal implications surrounding salary delays for resigning employees, refer to the insights below.
Employer Obligations and Employee Rights Under the Law
As outlined in Article 94 (1) of Law No. 13 of 2003, employers are mandated to provide wage payments to their employees at least once per month. Even if an employee has decided to resign, they are still entitled to receive their full salary based on their employment duration with the company.
Furthermore, Article 156(1) of the same law states that employers are required to settle all entitlements owed to employees promptly upon the termination of employment.
This raises a common question: Can an employer legally delay the salary of a resigning employee, and are such employees eligible for severance pay?
The answer is straightforward. Employers do not possess any legal grounds to delay the salary of an employee who has resigned.
However, as per the current regulations, the Manpower Law does not specifically mandate severance pay for employees who voluntarily resign unless this provision is explicitly included in their employment contract.
Read also: Effective Strategies for Team Engagement to Enhance Workplace Performance
Legal Implications of Salary Delay for Resigning Employees
Under Article 55 of Government Regulation No. 36 of 2021, which amends previous regulations, employers must comply with specific wage payment guidelines:
- Employers are required to disburse wages according to the agreed schedule between both parties.
- If the scheduled payment date coincides with a public holiday, a weekly rest day, or any other recognized holiday, wages must still be paid as per the terms in the collective labor agreement.
- Wages can be structured as daily, weekly, or monthly payments, but there should never be a gap exceeding one month between payments.
Failure to adhere to these stipulations, including delaying an employee’s salary after resignation, is considered a legal violation. The updated regulation also highlights that any form of salary delay or deduction without a legitimate reason will expose the employer to legal sanctions.
The consequences outlined in Government Regulation No. 36 of 2021 for salary delays of resigned employees include:
- If an employer delays salary payments, a penalty of 5% of the outstanding amount will be charged for each day of delay, starting from the fourth day up to the eighth day after the designated payment date.
- Should the salary remain unpaid beyond the eighth day, additional penalties will accrue.
- If the delay persists for more than a month, the employer will face increased fines along with interest, calculated based on the highest rates offered by government banks.
These regulations emphasize the importance of timely salary payments for resigned employees to avoid legal complications. Employers must comply with these rules to protect their business interests and maintain positive relations with their former employees.
Ensuring Compliance with Payroll Management
Given the complexities involved in payroll management, HRNetRimbun can provide expert support to ensure that your organization remains compliant with salary regulations.
Located in Indonesia, our recruitment and executive search services are designed to enhance your administrative capabilities. This includes payroll management for both active and former employees, ensuring legal compliance and operational efficiency.
By using our services, your organization can streamline its operations, allowing internal resources to focus on core business activities that drive growth and profitability. To explore how we can support your company, contact our team today for more information.
