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Jakarta Post

What is 'sweetener'? Savory provision introduced in omnibus jobs bill

  • Adrian Wail Akhlas and Ghina Ghaliya

    The Jakarta Post

Jakarta   /   Thu, February 13, 2020   /   05:09 pm
What is 'sweetener'? Savory provision introduced in omnibus jobs bill Members of the Confederation of Indonesian Trade Unions (KSPI) demonstrate in opposition to the omnibus bill on job creation in front of the House of Representatives in Senayan, Central Jakarta, on Wednesday. (JP/Dhoni Setiawan)

The government will make it compulsory for employers to provide bonuses or so-called “sweeteners” to reward employees in the omnibus bill on job creation.

The draft of the bill, obtained by The Jakarta Post on Wednesday, stipulates that employers must give the reward to improve worker welfare.

Businesses would be required to provide a bonus equal to one month of salary to those who have worked for less than three years at the company, a two-month salary bonus to those who have worked between three and six years, a three-month salary to those who have worked between six and nine years, a four-month salary to those who have worked between nine and 12 years and a five-month salary for workers with a tenure of more than 12 years.

The sweetener will be paid one time only if the bill becomes law and is to be paid to employees working before the law takes effect.

Read also: Omnibus bills submitted to House, public remains in dark

"This will be a reward for workers," Manpower Minister Ida Fauziyah told reporters after a meeting with House of Representatives’ Commission IX overseeing manpower in Jakarta on Wednesday.

The government submitted the long-awaited draft to the House on Wednesday afternoon after failing to meet its own deadline several times. If passed into law, the omnibus bill will amend more than a thousand articles in about 80 prevailing laws and is expected to attract more investment to help stimulate the country’s sluggish economy.

Labor unions have voiced their objection to the bill, which has provisions overhauling the Labor Law, saying it will undermine their rights.

The bill caps the compensation for laid-off workers at eight months of salary for 21 years of service from 10 months of salary for 24 years of service.

The sweetener provision will not be applied to micro and small businesses.

Read also: Palace operatives scramble to lobby labor groups over omnibus bill

"We have communicated with employers and decided to rule out small businesses because not every employer is able to provide workers with sweeteners," said Ida.

According to Law No. 20/2008 on micro, small and medium businesses, micro businesses are those that have a maximum of Rp 300 million (US$21,900) of annual sales while small businesses are those that have annual sales between Rp 300 million and Rp 2.5 billion.