The final entitlements of employees that must be paid at the end of the employment relationship include severance pay Uang Pesangon, service merit pay Uang Penghargaan Masa Kerja, rights compensation Uang Penggantian Hak, and farewell pay Uang Pisah. Retirement allowance and continuous service allowance are paid for a fixed number of months according to the employee's years of service, and the amount paid is calculated based on the fixed monthly wage at the time of termination of the employment relationship. Rights compensation has been changed by the Omnibus Law, and the previously stipulated medical and housing subsidy of ``(retirement allowance + continuous service benefit) x 15%'' has been removed. Purchase of unused annual paid leave rights and transportation expenses for employees and their families to return to their place of employment will remain the same.

[Reason for termination of employment relationship for which farewell money is provided]

On the other hand, remittance fees can be determined by each company. The provisions must be stipulated in the labor contract Perjanjian Kerja, employment regulations Peraturan Perusahaan, collective agreement Perjanjian Kerja Bersama, etc. Since farewell money is not obligated to be paid in all cases of termination of employment relationships, it is important to be aware of the situations in which farewell money must be paid. Before the Omnibus Act, there were three types of cases where farewell money was paid: (1) voluntary resignation, (2) deemed voluntary resignation due to unexcused absence of 5 or more consecutive days, and (3) disciplinary dismissal due to a serious mistake, but under the Omnibus Act, 3 There were additional types. (4) Retirement when an employee applies for dismissal due to a violation by the management, but it is determined that there is no violation by the management and the management does not wish to continue employing the employee; (5) Resignation due to being detained by the responsible authorities and unable to work for more than six months due to criminal charges that have caused damage to the company; and (6) Resignation due to being found guilty by the responsible authorities within six months of being detained.There are six types of farewell payments that need to be considered in total. The current employment regulations and collective bargaining agreement should not include the remittance payments listed in (4) to (6). Please take immediate action.

[Setting the shipping amount]

There are no regulations on how to set the farewell amount, so many companies have a method of calculating it based on a fixed monthly wage based on the employee's years of service, such as retirement allowance or continuous service allowance. Most likely, basic provisions are set, and each of the six types listed above is paid in multiples or percentages of the basic stipulations, but there is also a set amount for each type. We recommend that you consider each company's policies and suitability.

Related legislation: Decree No. 35 of 2021 PP-35/2021