Provincial and Regency/City Minimum Wages in Indonesia - DecentWorkCheck.org

Indonesia - Overview Minimum Wages

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Minimum Wage 2021 for Garment Sector

Indonesia Provincial and Regency/City Minimum Wage 2021

On October 26, 2020 the Ministry of Manpower through the Minister of Manpower issued a circular letter contained circular letter Number M/11/HK.04/2020 regulating the Determination of Minimum Wage in 2021 during the Corona Disease 2019 (Covid-19) Pandemic Period. This circular letter is addressed to the Governors of Indonesia. The issuance of the circular letter was motivated by a pandemic (covid-19) which had affected economic conditions and the company's ability to fulfill the rights of workers/laborers including paying wages, for this reason, taking into account the condition of the Indonesian economy during the pandemic (covid-19) and the urgent need for economic recovery nationally, then with this circular letter, the Governor is asked to make adjustments to the determination of the 2021 minimum wage value to be the same as the 2020 minimum wage value.

However, there are several provinces that have decided to continue to increase the Provincial Minimum Wage, including: DKI Jakarta, DI Yogyakarta, East Java, and South Sulawesi.

Brief information on setting up Minimum Wages in Indonesia:

1. Minimum Wage is the lowest monthly wage consisting of basic wage including fixed allowance.

2. Minimum Wage only applies to:

Single worker
Workers who have a working period of 0 years up to 1 year
Workers with permanent, contract employment status and/or in probation period

3. For workers who are married, and/or have more than 1 year working period, employers are obliged to apply the pay scale structure and shall be regulated in the applicable working conditions of the company.

4. Provincial Minimum Wage only applies Regency/City Minimum Wage is not established.

5. According to article 44 paragraph (1) and (2) GR 78 year 2015, Provincial, Regency/City Minimum Wage setting in 2017 is using minimum wage calculation formula, which is:

New minimum wage = current minimum wage + (current minimum wage x (Inflation + % GDP annual increase during the year))

6. Employer is prohibited to pay lower wages than Provincial Minimum Wage.

7. Employers who pay higher wages than Provincial Minimum Wage are prohibited in following years to reduce or pay lower wages than wages that are already established within the company.

8. For employer who can not afford to pay the minimum wage, employer may submit a written application for a suspension of the implementation of the Provincial Minimum Wage to the Governor through the Head of Service Office of Manpower and Transmigration.

9. Labour Inspector will do supervision over the implementation of Provincial Minimum Wage in accordance with prevailing laws and regulations.

The following is the list of Provincial and Regency/City Minimum Wage 2021 which are applicable in 34 Provinces across Indonesia: