Thursday, December 7, 2023

Gov’t Sets 10% Ceiling on Minimum Wage Rise for 2023

The Jakarta Globe
November 19, 2022 | 5:12 pm
Workers pack goods at the warehouse of e-commerce platform Lazada in Depok, West Java. (Antara Photo)
Workers pack goods at the warehouse of e-commerce platform Lazada in Depok, West Java. (Antara Photo)

Jakarta. The Manpower Ministry has issued a decree allowing district and provincial governments to raise the minimum wage by a maximum of 10 percent, which could see wages in some industrial cities like Jakarta top Rp 5 million per month.

The decree signed on Thursday by Minister Ida Fauziyah obliges all governors to decide on next year’s provincial minimum wage by November 28 at the latest.

The deadline for the formulation of minimum wage at the district and municipality levels is on December 7, according to the decree.

Adjustment in the minimum wage is determined by combining the inflation, the economic growth, and the productivity at work factor of the respective province. When the provincial economy is in a contraction, the planned minimum wage rise should consider the inflation rate only.


"If the formulated adjustment to the minimum wage ... exceeds 10 percent, the governor must determine the minimum wage with an adjustment of 10 percent maximum,” according to Article 7 of the ministerial decree.

Jakarta and two industrial districts in West Java namely Karawang and Bekasi could see their minimum wage exceed Rp 5 million if the 10 percent rise is imposed. The lowest amount an employer in the three areas can pay a worker is currently Rp 4.7 million.

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