Standard Minimum Wage Regulations in the Manpower Draft Bill

The House of Representatives of the Republic of Indonesia (“DPR RI”) is currently preparing Draft Bill on Manpower. The minimum wage formula is designed to benefit both workers and employers.

" Because so far, every year, the determination of the Provincial Minimum Wage (“UMP”) has always been a problem and a source of protest from workers. On the other hand, there are objections from employers if the increase is too high," said Deputy Chairman of Commission IX of the DPR RI, Yahya Zaini, to Hukumonline.

Through this regulation, the DPR RI and the government have set a more equitable minimum wage standard for both workers and employers. This policy is expected to have an impact on industrial sustainability. Until now, many industries have moved to areas with low Regency/City Minimum Wages (“UMK”) due to the gap between UMP and UMK between regions.

Other issues regulated in the Manpower Draft Bill include rules related to Termination of Employment, outsourcing, and fixed-term employment agreements. This is a follow-up to the decision of Constitutional Court (“MK”) in relation to Judicial Review of Law No. 6 of 2023 on Job Creation (“Law 6/2023”).