The primary legal foundation for the latest overtime regulations is UU No. 6 of 2023 Cipta Kerja. Additionally, technical rules are detailed in PP No. 35 of 2021. These regulations ensure transparency and fairness for both your company and all your employees.
Errors in calculating overtime pay can result in severe administrative sanctions. Your company credibility is at stake if employee rights are not met accurately.
Overtime Work Hour Limits According to PP No. 35 of 2021
Based on the latest government regulations, there are strict limits on overtime hours. This aims to maintain the health and life balance of your workers. Here are the crucial points that must be followed:
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Maximum Daily Overtime: Employees are only allowed to work overtime for a maximum of 4 hours in a single working day.
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Total Weekly Limit: The accumulation of overtime hours in one week must not exceed 18 hours.
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Written or Digital Consent: Overtime orders must be approved by the employee either in writing or through a digital system.
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Provision of Food and Drinks: Companies are required to provide food and drinks if overtime is performed for 4 hours or more.
Legal Overtime Pay Calculation Formula
Calculating overtime pay is based on the monthly wage, which consists of the basic salary and fixed allowances. According to the provisions, you must first determine the hourly wage using the following formula:
Hourly wage = 1/173 x Monthly wage
After obtaining the hourly wage figure, you can apply the overtime multiplier provisions on working days:
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First Hour: The employee is entitled to a wage of 1.5 times the hourly rate.
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Second Hour and Onwards: The employee is entitled to a wage of 2 times the hourly rate.
If overtime is performed on official holidays or weekly rest days, the multiplier will be significantly higher. Ensure you record every minute of overtime with great precision to avoid budget leaks.
iPresens: Automated Overtime Compliance Solution
Calculating overtime manually is certainly risky and wastes a lot of your productive time. iPresens is here to ensure your company overtime calculations are always accurate and legally compliant. Here are the excellent features of iPresens that will simplify your management:
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✅ Digital Overtime Approval: Employees can apply for overtime via the app, and you can approve it in real time.
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✅ Real Time Compliance Reports: Monitor the accumulation of team overtime hours so they do not exceed the maximum limit of 18 hours per week.
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✅ Automated Payroll Calculation: The system will automatically calculate overtime pay based on the latest valid formulas.
Modernize Your Overtime Management System Immediately!
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Get a free demo for 2 full months for a capacity of up to 50 employees. After the trial period ends, subscription fees are very affordable, starting from 45 thousand rupiah per month. Register your company through the official iPresens website right now!
