Jakarta, CNBC Indonesia – The government issued new regulations regarding wages through Government Regulation Number 51 of 2023. This regulation contains amendments to Government Regulation Number 36 of 2021 concerning Wages. Thus, the minimum wage will certainly increase.
“This increase in the minimum wage is a form of appreciation to fellow workers/laborers who have contributed to our economic development so far,” said the Minister of Manpower, Ida Fauziyah, in a press release, Saturday (11/11/2023).
Ida explained that the certainty of increasing the minimum wage is obtained through the application of the Minimum Wage Formula in PP Number 51 of 2023 which includes 3 variables, namely Inflation, Economic Growth and Certain Indexes (symbolized in the form α).
The Certain Index as intended is determined by the Regional Wages Council by considering the level of labor absorption and average/median wages.
Apart from that, other factors that are relevant to employment conditions are taken into consideration. With these three variables, economic and employment conditions in a region have been accommodated in a balanced manner. So that the Minimum Wage that will be determined can be a solution to job security and business continuity.
With these provisions, there is a strengthening of the role of the Regional Wage Council in the form of an additional role to provide advice and considerations to regional heads regarding the implementation of minimum wages, as well as the structure and scale of wages in companies in their respective regions.
“An increase in the minimum wage can encourage an increase in people’s purchasing power, which ultimately has an impact on the absorption of goods and services produced by entrepreneurs, so that companies develop and encourage the opening of new job opportunities,” he explained.
 Photo: A number of labor elements carry out a demonstration at the City Hall Office, Central Jakarta, Friday (2/12/2022). (CNBC Indonesia/ Muhammad Sabki)A number of labor elements staged a demonstration at the City Hall Office, Central Jakarta, Friday (2/12/2022). The workers are demanding an increase in the DKI Jakarta provincial minimum wage (UMP). (CNBC Indonesia/ Muhammad Sabki) |
According to Ida, the existence of wage provisions as regulated in PP Number 51 of 2023 will create business certainty for the business and industrial world.
So it is hoped that the existence of this regulation can create a fair wage system in companies, one of which is by implementing a wage structure and scale.
“The implementation of the wage structure and scale will motivate increased productivity and performance of workers/laborers because workers/laborers will be paid wages based on their work output or productivity,” he said.
Apart from all that, the newly published PP on Wages also aims to prevent disparities or wage gaps between regions.
“So in terms of preventing gaps or disparities in minimum wages between regions, PP Number 51 of 2023 is better than the wage regulations that have existed so far,” he said.
According to Ida, the existence of wage provisions as regulated in PP Number 51 of 2023 will create business certainty for the business and industrial world.
So it is hoped that the existence of this regulation can create a fair wage system in companies, one of which is by implementing a wage structure and scale.
“The implementation of the wage structure and scale will motivate increased productivity and performance of workers/laborers because workers/laborers will be paid wages based on their work output or productivity,” he said.
Apart from all that, the newly published PP on Wages also aims to prevent disparities or wage gaps between regions.
“So in terms of preventing gaps or disparities in minimum wages between regions, PP Number 51 of 2023 is better than the wage regulations that have existed so far,” he said.
Ida stated that the PP, which was issued on November 10 2023, to coincide with Heroes’ Day, was the basis for determining the Minimum Wage for 2024 and beyond.
“Furthermore, we ask the Governors, Heads of Departments in charge of employment, and Regional Wage Councils to carry out their duties as mandated by this government regulation, and to determine the Provincial Minimum Wage no later than November 21 and for Regency/City Minimum Wages by November 30,” he concluded
[Gambas:Video CNBC]
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(wur/wur)