Dream - Every month employees will receive a salary. The timing of salary disbursement depends on the company's policy, it can be at the beginning or end of the month. Salary matters are regulated in Government Regulation Number 36 of 2021 concerning Wages. However, is it allowed for companies to installments their employees' salaries?
Cannot Pay Salary in Installments
"In the regulation, it is stated that employers are obliged to pay wages at the agreed time between employers and workers/laborers. Thus, companies are not allowed to withhold their employees' salaries."
"If the company is proven to have violated the above rules, it may be subject to sanctions in the form of fines. The following are the sanctions for companies that are late in paying their employees' salaries, as quoted from the Glints website, an online platform for recruiting workers."
"Sanksi" in English is "Sanctions".
"Starting from the fourth day until the eighth day from the due date of payment, a penalty of 5 percent is imposed for each day of delay in the payment that should have been paid."
After the eighth day, if the wages are still unpaid, a late fee will be imposed as referred to in letter a plus 1 percent for each day of delay, with the condition that one month cannot exceed 50 percent of the wages that should have been paid. After one month, if the wages are still unpaid, a late fee will be imposed plus interest at the highest interest rate applicable at the government bank.
"Although fined, the company still has to pay the overdue wages to its employees."
Alternative If the Company Cannot Pay in Full
Still referring to the same regulation, it is mentioned that companies that are unable to pay wages on a monthly basis can also be paid daily or weekly.
However, the company still has to comply with the provision of a payment period for wages that must not exceed 1 month.
Example, according to the employment agreement, employee salaries are paid on the 25th of every month. In September, the company apparently can no longer afford to pay your monthly salary in full. The company can change the wage payment scheme to daily or weekly wages, but the September salary payment must still be paid in full on September 25th.
This alternative can only be done if there is an agreement between the company and the employees. So the company must inform the employees first.
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