Manpower Minister Urges Governors to Set Provincial Minimum Wage

Minister of Manpower Ida Fauziyah (Photo by: Documentation of BPMI of Presidential Secretariat)

Minister of Manpower Ida Fauziyah has urged the governors to set the provincial minimum wage (UMP) no later than 21 November 2021.

The minimum wage must be in accordance with the provisions of Government Regulation Number 36 of 2021 on Wages, which is the derivative rule of Law Number 11 of 2020 on Job Creation.

“The governors must determine the UMP no later than 21 November 2021, and since it is a national holiday, the determination must be carried out one day before at the latest, i.e. on 20 November,” the Minister said in a press statement, Jakarta, Tuesday (16 /11).

According to her, the regency/municipality minimum wage (UMK) must be determined no later than 30 November 2021 after the determination of the UMP.

The Minister said that the provisions for the deadline have been reaffirmed in Circular of Minister of Home Affairs Number 561/6393/SJ on the determination of the 2022 minimum wage, which was sent to all governors.

Ida further emphasized that the determination of the 2022 minimum wage is based on Job Creation Law and Government Regulation Number 36/2021 as its derivative regulation.

The minimum wage aims to provide protection to workers/laborers so that their wages are not too low due to their weak position in the labor market.

“The minimum wage policy is intended as an instrument of poverty alleviation and of course, to boost the progress of Indonesia’s economy through fair and competitive wages,” she said.

On that occasion, Ida also revealed that the minimum wage is the lowest wage set by the Government that applies to workers/laborers with working period less than one year at the company concerned.

“The essence of the minimum wage formula, based on Government Regulation Number 36 of 2021, is to reduce the minimum wage gap between regions. This inter-regional wage fairness, once again, is achieved through the approach of average household consumption in each region,” she explained.

Furthermore, the Minister underscored that according to Government Regulation Number 36 of 2021, the minimum wage is set based on areas, namely the UMP and the UMK. The minimum wage is no longer set based on sector or sectoral minimum wage (UMS).

However, the UMS that has been set before 2 November 2020 will remain valid until the UMS ends or until the UMP/UMK in the area is raised.

“Thus, the UMS remains valid and must be implemented by companies,” she remarked.

Visit the official website of Ministry of Manpower via this link. (RIF/MMB)