Indonesia releases Eid allowances to public sector workers

The government of Indonesia has distributed 20.86 trillion rupiah, or about US$1.27 billion, in Eid allowances to central government employees, police, military personnel, and pensioners.

Finance Minister Sri Mulyani Indrawati believes the THR (Tunjangan Hari Raya) payments will strengthen consumer purchasing power and stimulate economic activity in the run-up to Eid.

In total, the Ministry of Finance has allocated Rp49.4 trillion (over US$3 billion) for THR payments to all state personnel, including Rp19.3 trillion designated for regional government employees.

President Prabowo Subianto earlier ordered THR payments for employees in private companies, state-owned enterprises, and region-owned enterprises be disbursed no later than seven days before Eid. He announced this directive after consultations with Red and White Cabinet ministers.

Apart from formal employees, Prabowo also urged app-based transportation companies to extend holiday bonuses to their driver and courier partners, acknowledging their vital role in Indonesia’s logistics and transport sector.

The Ministry of Manpower has been tasked with negotiating the terms of bonuses with platform providers such as GoTo and Grab.

Also Read: GoTo, Grab gig workers get Eid bonus

Government enforces timely THR payments

To ensure timely and complete THR disbursement, the Manpower Ministry has issued a circular mandating companies to pay THR in full. Installment payments are not permitted.

The deadline for distribution is at least seven days before the religious holiday of Eid al-Fitr on 31 March. This means companies must complete payments by 24 March.

The THR applies to all employees who have worked for at least one month, regardless of whether they are on fixed-term or indefinite-term contracts. Those who have been employed for a year or more are entitled to one month’s salary as THR, while newer employees will receive a proportional sum based on their length of service.

For daily wage earners and production-based workers, THR is calculated based on their average earnings over the past 12 months. Companies that fail to comply face potential government intervention.

The Manpower Ministry has established complaint and consultation centres across Indonesia to handle THR-related disputes.

Manpower Minister Yassierli reiterated that THR is a mandatory employer obligation and urged businesses to adhere to the payment schedule.

Mass layoffs threaten workers’ holiday bonuses

Despite the government’s push for THR compliance, tens of thousands of laid-off workers may miss out on their holiday bonuses this year.

The Indonesian Trade Unions Confederation (KSPI) estimates around 60,000 workers across 50 companies have been affected by layoffs linked to bankruptcies, downsizing, and factory relocations abroad, as reported by Indonesia Business Post.

Data from KSPI’s regional offices in Java indicates that 37 companies have executed mass layoffs without ensuring severance pay or THR.

Textile giant Sritex is among the firms failing to meet their obligations. Reports suggest tens of thousands of Sritex employees are certain to forgo THR payments this year.

KSPI President Said Iqbal has sharply criticised the government’s response, particularly the Manpower Ministry’s purportedly unfulfilled assurances that THR payments would be made on time.

A review of company layoffs between January and February 2025 shows that at least 44,000 workers have yet to receive either their severance or THR. Meanwhile, verification is ongoing for an additional 16,000 laid-off workers from 13 companies.

The industries hardest hit include palm oil, textiles, footwear, electronics, retail (notably KFC), services, and automotive manufacturing.

KSPI has demanded that the government establish a dedicated task force (Satgas PHK) to address the widespread issue of unpaid worker entitlements.

Also Read: 5 ways to support staff during Ramadan

Allegations of worker intimidation emerge

Beyond financial concerns, former Sritex employees who sought legal recourse have allegedly faced threats and intimidation. According to Lukman Hakim, coordinator of KSPI-Labor Party’s Workers’ Complaint Post, some workers were reportedly warned against pursuing legal action, with threats of abduction cited as a tactic to dissuade them.

Iqbal has called for an immediate investigation into these allegations, warning that – if proven true – they represent a severe violation of worker rights. He stressed that the government cannot turn a blind eye and urged swift intervention to prevent the issue from escalating.

KSPI maintains that under Indonesia’s labour laws, companies must continue paying wages and entitlements – including THR – while labour disputes remain unresolved.

Iqbal has demanded that the Manpower Ministry enforce legal protections and ensure that affected workers receive their rightful holiday allowances.

“The government cannot remain silent. We demand that the Minister of Manpower establish a task force to oversee and resolve this issue. Do not just focus on Sritex; all layoffs must be handled thoroughly,” he said.

With Eid fast approaching, the stakes are high for thousands of laid-off workers who rely on THR to support their families. The government’s response in the coming days will determine whether laid-off workers receive the financial support they are legally entitled to – or are left to weather the festive season without it.