On 1 November 2019, the Governor of Jawa Barat (West Java) issued Decision Letter SK Gubernur Nomor 561/Kep.1046-Yanbangsos/2018 stipulating the 2020 Provincial Minimum Wage (Upah Minimum Provinsi/UMP) of Jawa Barat province amount of IDR 1,810,351.36 per month (US$ 125). The calculation of the 2020 UMP is based on national inflation and national economic growth (Gross Domestic Product growth) data as per the Indonesian Central Statistics Agency (BPS RI). As reported, the national inflation rate is 3.39% and GDP growth is 5.12% making the total increment rate in 2020 to 8.51%.
In theory, UMP is used as the floor wage refer by District/City Wage Council when setting UMK. However, as it has been accustomed that municipalities in Jawa Barat issue or recommend the issuance of district/city minimum wage (Upah Minimum Kabupaten/Kota or UMK), the lowest wage floor for the next year UMK is the current year UMK. Thus, in Jawa Barat case UMP is applicable in district/city where UMK is not set by the respective Wage Council.
Once Wage Council sets next year minimum wage, the head of municipality (either Mayor or Regent) would provide recommendation to Governor to be confirmed. Generally, Governor will issue either Governor Regulation or Governor Decision. This is due to Act No. 12 of 2011 concerning Formation Statutory Regulations, Provincial Regulations and Regency/City Regulations are classified and identified in the Indonesia legislative hierarchy. So that the legal force of a Decree or Governor Regulation such as Decision or Regulation of UMK is binding.
This year, however, the Jawa Barat Governor stipulate the 2020 UMK in a Circular Letter (Surat Edaran/SE). Circular Letter in Indonesia is conceptualized as merely clarifying or giving instructions on how to carry out certain things that are considered important and urgent that do not yet exist or the rules as primary source of positive law in Indonesia remains unclear. Despite of this, in substance Circular Lettera should not oppose superior laws or regulations. If there is a conflict between the Circular Letters and Law & Regulations, the superior Laws and Regulations take precedence.
Circular Letters are only policy rules from Administrative officials, such as Minister or Governors, instead of legal products. It is only played a role of internal instruction and recommendations. Thus, there is no legal consequence for not complying with Circular Letters. In other words, the legal consequences the 2020 UMP likely take precedence over the 2020 UMK.
As reference, same as the UMP, the 2020 increment of district/city minimum wage in Jawa Barat follows the set formula (national inflation rate + GDP growth). The specific amount of each district/city could be found in the attachment below.
SE UMK JaBar 2020