Surabaya

Labor Laws and Rights in Surabaya, Indonesia

1. Legal Framework

• Labor Law: The primary legislation governing labor relations in Indonesia is Law No. 13 of 2003 on Manpower. This law outlines the rights and obligations of employers and employees.
• Regulations: Local regulations may also apply, and it is advisable to consult the Surabaya City Government for specific local labor regulations.

2. Working Hours

• Standard Working Hours: The standard workweek is 40 hours, typically divided into 8 hours per day for 5 days. For 6-day workweeks, the limit is 7 hours per day.
• Overtime: Overtime is permitted but must be compensated at a rate of 1.5 times the regular hourly wage for the first hour and 2 times for subsequent hours.

3. Minimum Wage

• Provincial Minimum Wage: As of 2023, the minimum wage in East Java (including Surabaya) is approximately IDR 2,000,000 per month. This amount is subject to annual adjustments based on economic conditions.
• Sector-Specific Wages: Certain sectors may have higher minimum wages, and employers must comply with these regulations.

4. Employee Benefits

• Health Insurance: Employers are required to enroll employees in the national health insurance program (BPJS Kesehatan).
• Social Security: Employees must also be registered for the national social security program (BPJS Ketenagakerjaan), which covers work-related accidents, death, and old-age benefits.
• Annual Leave: Employees are entitled to a minimum of 12 days of paid leave per year after one year of service.
• Public Holidays: Employees are entitled to paid leave on national holidays.

5. Termination Policies

• Just Cause: Termination must be based on just cause, such as misconduct or redundancy. Employers must provide written notice and follow due process.
• Severance Pay: Employees terminated without just cause are entitled to severance pay, calculated based on their length of service.
• Dispute Resolution: Disputes regarding termination can be brought to the Industrial Relations Court.

6. Costs and Compliance Procedures

• Registration Costs: Employers must register with the Ministry of Manpower and may incur costs related to compliance with labor laws, including health and social security contributions.
• Documentation: Employers must maintain accurate records of employee contracts, working hours, and payroll to ensure compliance with labor laws.

7. Local Considerations and Cultural Practices

• Cultural Sensitivity: Understanding local customs and practices is crucial. Respect for hierarchy and seniority is important in the workplace.
• Labor Unions: Employees have the right to form and join labor unions. Union activities are common in Surabaya, and employers should engage constructively with unions.
• Workplace Environment: A collaborative and respectful workplace culture is valued. Employers are encouraged to foster a positive work environment to enhance employee satisfaction and productivity.

8. Resources for Further Information

• Ministry of Manpower: Kementerian Ketenagakerjaan
• Local Government: Surabaya City Government’s labor office for local regulations and support.

This structured overview provides essential information on labor laws and rights in Surabaya, Indonesia, ensuring compliance and understanding of local practices for both employers and employees.