Legal Opinion on 50% Wage Payment During Work Stoppage by the Company

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 Legal Analysis

According to Article 93 paragraph (2) letter f of Law No. 13 of 2003, if employees are willing to work but are not assigned to do so due to the employer’s decision or avoidable reasons, the employer remains obligated to pay full wages.

In this case, while the company considers the drop in orders as an unavoidable circumstance, such conditions may still be interpreted as a relative force majeure that does not entirely release the employer from its wage obligations. Fluctuations in customer orders are typically categorized as business risks, rather than absolute external events.

Additionally, Article 23 paragraph (3) of Government Regulation No. 36 of 2021 strictly prohibits employers from paying wages below the minimum standard, unless a formal application for postponement of minimum wage payment has been submitted and approved by the manpower authority.

The bipartite agreement is legally valid as a form of mutual understanding and procedural compliance. However, under Indonesian labor law, such agreements cannot override mandatory statutory rights (vide Article 93(2)(f) and Article 88E(2) of Law No. 13 of 2003), particularly concerning minimum wage protection and full payment obligations when workers are willing and available to work.

A Circular Letter is not a binding regulation (vide Article 8 of Law No. 12 of 2011) and does not override mandatory labor provisions concerning wages. It serves as administrative guidance for employers and labor unions. While it encourages companies to adopt alternative solutions before termination, it does not legalize wage reduction, especially for lower-level employees. Therefore, relying solely on this Circular Letter does not constitute a strong legal basis for paying wages below the statutory minimum.

Conclusion / Takeaway:
Employers must continue to comply with statutory wage obligations even during temporary work stoppages, unless properly approved by the manpower authority. Bipartite agreements and Circular Letters may guide practice but cannot replace mandatory labor law protections.

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