Indonesia: Legislation to increase maternity leave approved

Employer Action Code: Monitor

The House of Representatives has unanimously passed the Draft Law on the Welfare of Mothers and Children in the First 1,000 Days of Life Phase that, among other things, potentially provides for longer employer-paid maternity leave benefits. As the title of the law indicates, its main aim is to improve the welfare of mothers (both at home and at work) and that of their newborn children by mandating various maternity benefits for employees.

Key details

The Draft Law, approved on June 4, provides for:

• Six months of maternity leave (including prenatal and postnatal leave), paid by the employer at 100% of salary for the first four months and at 75% of pay for the final two months: The current maternity leave entitlement under the Manpower Law is three months, paid by the employer at 100% of salary. Further government guidance is expected (e.g., on whether eligibility for the full six months of leave requires medical justification).
• Three days of employer-paid paternity leave in addition to the current entitlement of two days, if agreed by the employer: In addition, fathers would be required to accompany the mother at birth.
• Employer provision of adequate breastfeeding facilities and support at the workplace for new mothers as well as healthcare services and daycare facilities: Details are yet to be specified.

Employer implications

The Draft Law will take effect when three Government Regulations and one Presidential Regulation are introduced, with implementation guidelines. Only 8% of companies surveyed in Indonesia offer paid maternity leave in excess of statutory requirements, providing 120 working days at the median. Twenty-five percent of companies offer enhanced paid paternity leave benefits, providing five days at the median. It’s unclear how the required presence of the father at birth would be enforced or if there would be any financial incentives for companies to agree to additional paid paternity leave. New employer mandates, such as provision of daycare and breastfeeding facilities, could impose substantial new workplace obligations, depending on the implementation guidelines. Employers should monitor the progress of implementation and consider conducting a review of their policies on support for working parents.