Indonesia Basic Information :Labor & Minimum Wages

LABOR & MINIMUM WAGES

In Indonesia, minimum wages is the monthly wage payable to labor. It is mainly consist of fixed basic wage that is stipulated by regional governor as safety net.

The latest Government Regulation No. 78 of 2015 regarding Wages (GR 78) introduces several important changes, notably those concerning the calculation of provincial minimum wages and the requirement that all employees in Indonesia be paid in Rupiah.

GR 78 implements the Article 97 of Law No. 13 of 2003 regarding Manpower, and repeals and replaces Government Regulation No. 8 of 1981 regarding the Protection of Wages.

The main points of GR 78 are:

1.Minimum wage calculation GR 78 introduces a new formula for provinces to calculate their minimum wage each year, beginning in 2016. The introduction of the formula should bring  certainty to the annual calculation of minimum wage and help create a more reliable business climate.

2.The new formula is as follows:

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

3.Wages must be paid in Rupiah

The Article 21 of GR 78 requires that wages for all employees be paid in Indonesian Rupiah and does not differentiate between foreign and local employees.

4.Wage scale and structure

GR 78 requires employers to prepare a wage scale and structure for employees by taking into consideration the group, positions, years of service, education, and competence of employees. Employers must inform employees of this wage scale and structure, and GR 78 requires that a copy of the wage scale and structure be attached to company regulation registration or renewal applications.

PROVINCES MONTHLY REGIONAL MINIMUM WAGES 2017 (IDR) MONTHLY REGIONAL MINIMUM WAGES 2017 (USD)
Nangroe Aceh Darussalam 2,500,000 188.0
Sumatera Utara 1,961,354 147.5
Sumatera Barat 1,949,284 146.6
Bangka Belitung 2,538,673 190.9
Kepulauan Riau 2,358,454 177.3
Riau 2,266,722 170.4
Jambi 1,906,650 143.4
Bengkulu 1,605,000 120.7
Sumatera Selatan 2,388,000 179.5
Lampung 1,908,447 143.5
Banten 2,127,113 - 3,331,998 159.9 - 250.2
DKI Jakarta 3,355,750 252.3
Jawa Barat 1,433,901 - 3,605,901 107.8 - 271.1
Jawa Tengah 1,370,000 - 2,125,000 103.0 - 159.8
Jawa Timur 1,388,848 - 3,296,213 104.4 - 247.8
Yogyakarta 1,337,650 - 1,572,200 100.6 - 118.2
Bali 1,956,727 147.1
Nusa Tenggara Barat 1,631,245 122.7
Nusa Tenggara Timur 1,525,000 114.7
Kalimantan Barat 1,882,900 141.6
Kalimantan Selatan 2,258,000 169.8
Kalimantan Tengah 2,227,307 167.5
Kalimantan Timur 2,354,800 177.1
Kalimantan Utara 2,030,000 152.6
Gorontalo 2,030,000 152.6
Sulawesi Utara 2,598,000 195.3
Sulawesi Tengah 1,807,775 135.9
Sulawesi Tenggara 2,002,625 150.6
Sulawesi Selatan 2,435,625 183.1
Maluku 1,925,000 144.7
Maluku Utara 1,975,000 148.5
Papua 2,663,646 200.3
Papua Barat 2,421,500 182.1

Based on data above, it can be concluded that Jakarta became the province with highest minimum wage at USD 252,3 (IDR 3.355.750) per month. But several cities/regencies experience higher minimum wage than Jakarta, such as Bekasi regency minimum wage of USD 265.4 (IDR 3,530,438) Bekasi City USD 270.8 (IDR 3.601.650) and Karawang Regency USD 271.1 (IDR 3,605,272).

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