2017 (Industry) Sector Minimum Wages: All Regions

Industry sector minimum wage (UMSP/UMSK) is the lowest wage which applies in certain sector of industry, either in a province or district/city. UMSP/UMSK is determined by Governor (head of provincial government) base on agreement between employers organization and trade union/s in the concerned sector.

Article 11 paragraph (3) Minister of Manpower and Transmigration Regulation No.7 of 2013 concerning Minimum Wages stipulates that provincial sector minimum Wage (UMSP) must not be lower than provincial minimum wage (UMP). Also, municipal sector minimum wage (UMSK) must not be lower than municipal minimum wage (UMK). Moreover, Article 18 paragraph (1) stipulates if a company covers more than one industry sector, the applicable minimum wage is either UMSP or UMSK.

Although the UMSP / UMSK is effective from January 1, it is very common that the Governor’s Decree on UMSP / UMSK is issued around March-July every year. In addition, there is no certainty that an industry sector where sector minimum wage applies this year would also have a sector minimum wage in the following year because it solely depends on agreements between employers’ organizations and trade union/s. This likely causes uncertainty in the calculation of company budgets.

Below file consists of the 2017 (industry) sector minimum wage  figures of several provinces and districts/cities.

umsp-dan-umsk-2017

2017 Provincial and Municipal Minimum Wages

Provincial Minimum Wage (UMP) is stipulated and announced by Governors simultaneously every 1 November. In addition to the UMP, Governors can determine municipal minimum wage (UMK) based on the recommendation of the Provincial Wage Council and of the regent/mayor. UMKs are stipulated and announced by Governors no later than 21 November. In general, minimum wage valid for one year starting from 1 January to 31 December. It is reviewed every year.

The figures in the attached file is of year 2017.

ump-dan-umk-2017

2019 Minimum Wage Forecast

On 15 October 2018 Minister of Manpower issues Circular Letter No. B.240/M-Naker/PHISSK-UPAH/X/2018 on the Submission of Data about the National Inflation Rate and Gross Domestic Product Growth of 2018.

The Circular Letter stipulates that Governors should set 2019 minimum wage in accordance with Government Regulation Number 78 of 2015 concerning Wages (PP No. 78 of 2015). Also, Governors are obliged to announced the 2019 provincial minimum wage (UMP) on 1 November 2018. Further, it stipulates that Governor can (not oblige) set and announce municipal minimum wages (UMK) for each district/city under their province no later than 21 November 2018.

In accordance with Government Regulation No. 78 of 2015, minimum wage increment should equal with inflation rate and national economic growth. The numbers come from the Central Statistics Agency, which is in 2019 amounted to 2.88% of inflation rate and 5.15% of economic growth. Thus, minimum wage in 2019 according to the Government Regulation in question is 8.03% (eight point zero three percent). This is lower than 2018 which is 8.71%.

Refer to the last three years, most probably the increament ranges between 7.5% to 12%.