Can Company Cut Employess Wages Due To COVID-19?

Employees wages must be paid in full. However, the company can enter into agreement with the employees to delay or reschedule the payment.

The coronavirus outbreak, which has spread to more than 110 countries with more than 118,000 cases, has made Coronavirus Disease 2019 or COVID-19, a disease caused by a SARS-like virus, a pandemic. That is, this disease has spread widely and systematically globally, in almost all countries in the world, one of which is Indonesia.

Until this news was revealed, there have been 514 positive cases of the coronavirus in Indonesia, spread in 20 provinces. The most cases until now are the Province of DKI Jakarta. Various government agencies have issued appeals regarding COVID-19, one of which is the Ministry of Manpower.

On March 17, 2020, the Minister of Manpower of the Republic of Indonesia, Ida Fauziyah, issued a Circular of the Minister of Manpower of the Republic of Indonesia Number M/3/HK.04/III/2020 concerning Worker/Labor Protection and Business Continuity in the Context of Prevention and Management of COVID-19. This letter is addressed to the Governors throughout Indonesia and requested to forward to the Regents/Mayors or stakeholders of each region.

Broadly speaking, the circular is divided into two major parts, namely prevention of the spread and handling of cases regarding COVID-19 in the work environment and remuneration protection for workers/laborers regarding COVID-19.

The following is the content of the Circular of the Minister of Manpower regarding COVID-19:

1. Seek to Prevent the Spread and Cases Handling Regarding COVID-19 in the Work Environment
   1. To provide guidance and supervision for the regulation implementation in the field of Occupational Safety and Health.
   2. Disseminating information to all levels of the organization and related parties who are in the area of ​​guidance and supervision of the Governors.
   3. Record and report to the relevant agencies every case or a suspected COVID-19 case at workplaces.
   4. Instruct every Company Leader to anticipate the spread of COVID-19 to workers/laborers by taking preventative measures such as clean and healthy living behavior by integrating into the OSH program, empowering the Committee for Occupational Safety and Health, and optimizing the function of occupational health services.
   5. Encourage all Company Leaders to immediately create preparedness plans to face COVID-19 pandemic that aim to minimize the risk of transmission at workplaces and maintain business continuity.
   6. If there are workers/laborers or businesspeople who are at risk, suspected or experiencing illness due to COVID-19, then steps are taken according to health standards issued by the Ministry of Health.
2. Implement Remuneration Protection for Workers/Laborers regarding the COVID-19 Pandemic
   1. For workers/laborers categorized as Person Under Monitory (PUM) related to COVID-19 based on the doctor’s statement so that they cannot be in work for a maximum of 14 (fourteen) days or according to the Ministry of Health standards, then the wages are paid in full.
   2. For workers/laborers who are categorized as COVID-19 suspected cases and are quarantined/isolated according to the doctor’s statement, the wages will be paid in full during the quarantine/isolation period.
   3. For workers/laborers who do not come to work due to illness COVID-19 and proven by the doctor’s statement, the wages are paid according to regulations.
   4. For companies that limit business activities due to government policies in their respective regions for the prevention and control of COVID-19, so that some or all of their workers/laborers do not come to work, taking into account the business continuity, so the amount changes and payment method of workers’/laborers’ wages are resolved by the agreement between the employer and the worker/laborer.

According to the above policy, employers still have to comply with Law No. 13 of 2003 regarding Manpower. The government has not provided any exemption to this Covid-19.  However, in this very unfortunate situation, employers may enter into an agreement with the workers to delay to make full payment or reschedule the wages payment in partly.

 

Author : Frederik Yu

 

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