Manage Hourly Wage for Part-Time Employees

Is your organization the type to pay part-time employees on an hourly basis?

The latest legislation, PP No 36/2021, regulates how hourly wages are calculated, and this new regulation also covers part-time workers.

According to the laws of the Republic of Indonesia, wages based on time units are set on an hourly, daily, or monthly basis. In Article 16, it is emphasized that the determination of hourly wages can only be made for workers/laborers who work on a part-time basis.

Meanwhile, here are the regulations for part-timer’s working hours in accordance with the Indonesian regulation:

-Less than 7 hours in 1 day
-Less than 35 hours in 1 week

Hourly wages must be paid based on an agreement between the employer and the worker, based on the condition that it cannot be lower than the calculated hourly wage formula. In formulating the hourly wage formula, the government uses the median value of the highest part-time hours of all provinces, which is 29 hours a week.

With this new regulation, companies have the opportunity to hire employees with daily working hours of less than 7 hours and weekly hours of less than 35 hours, as well as being able to pay hourly wages.

Having part-timers that are paid hourly, comes with its ups and downs. For example, it’s a flexible working scheme that suits well with today’s working culture, and you can gain some budget efficiency by hiring them. But at the same time, it’s quite a complicated task to count their payroll, and the organization must come up with a great method to manage the hours tracking, time and attendance. If these issues sound familiar to you, worry not, you can trust these matters to us at KPSG.