Annual Leave Rights for Contract Employees in Indonesia

     In Indonesia, there are various types of employment, contract-wise. There are permanent-type, part-time, and contract employees. The differences among those types are in the work period, employment agreement, type of work, and termination policy.

     During probation period, companies usually offer a three-month work contract to new hires before appointing them as permanent employees. However, someone can be a contract employee for years.

     Regardless of their employment status, contract employees still have rights that companies must fulfill. One of them is the annual paid leave rights. A full-time, permanent employee’s salary won’t be subtracted if they leave the office for personal reasons.

     It is important to note that empoloyees may need time off for various reasons, either personal, family matters, or recreational time. When they use this annual leave, they are also entitled to a salary. So how leave rights for contract employees regulated in Indonesia?

     According to the Job Creation Law No. 11/2020 Article 79, 12 working days annual leave will be given to a worker who has worked for 12 months. It means that contract employees will get annual leave when they have worked for at least 12 months. Then, as stipulated by the Job Creation Law No. 11/2020 article 81, No. 23 Paragraph 3, the employee is still paid when they use those annual leave.

     Unfortunately, for employees who work less than a year, the Indonesian government has not guaranteed their annual leave rights. However, the companies may voluntarily grant the employees leave rights through their management regulation.

     If the annual leave is one of the work agreement terms, contract employee will have their rights. Besides, the companies need to provide the employee a clear explanation regarding the annual leave rules in their companies to avoid future disputes.

    Contract employees should ask for their leave rights before signing a work agreement. The companies should also manage the employees' leave rights fairly.

     Fair and just employee leave management, including to contract employees, help to avoid loss for both parties and benefit the talent management. It will maintain high-performing employees and reduce the employees' turn-over rate as well.