Jakarta. Deputy Speaker of the House of Representatives, Sufmi Dasco Ahmad, confirmed that Government Regulation (PP) No. 51 of 2023, which governed minimum wage determinations, is no longer valid. This follows a decision by the Constitutional Court (MK) that annulled several provisions of the Omnibus Law on Job Creation.

“The Constitutional Court’s ruling means PP 51/2023 is no longer in effect,” Dasco announced on Wednesday during a press briefing at the Parliament Complex in Senayan, Jakarta.

The annulled regulation had served as the legal foundation for calculating minimum wages based on factors such as inflation, economic growth, and a wage index coefficient. The court’s decision effectively overturned parts of the Job Creation Law, which had faced criticism for potentially undermining labor protections.

Dasco added that he had met with key figures, including Said Iqbal, President of the Indonesian Labor Party, Justice Minister Supratman Andi Agtas, and Manpower Minister Yassierli. They agreed to carefully revisit wage regulations.

“It was agreed that we will collaborate to review the wage indices to ensure fairness, so neither workers nor employers are disadvantaged,” Dasco said.

Iqbal emphasized the importance of issuing a new Ministerial Regulation to address the legal void created by the MK ruling. This regulation is expected to provide clarity on minimum wage determination for 2025.

“It doesn’t have to be finalized by November 21, 2024, as long as all parties reach an agreement,” Iqbal concluded.

President Prabowo Subianto has instructed his cabinet to implement the MK ruling, which annulled 21 articles of the Job Creation Law, stressing the need for minimum wage regulations by November 26.

Bob Azam, Chairman of the Employment Division of the Indonesian Employers Association (Apindo), expressed concern that the court's ruling could lead to regulatory uncertainty, potentially harming the investment climate. He highlighted that regulatory stability is crucial for businesses and investors planning for the long term.