Prabowo Signs PP on Wages, Wage Increase Using New Formula

JAKARTA - President Prabowo Subianto has signed a Government Regulation (PP) on remuneration which regulates a new formula for minimum wage increases. In the rules, wage increases are determined based on the inflation formula plus economic growth multiplied by alpha, with an alpha range of 0.5 to 0.9 points.

Minister of Manpower Yassierli said that the wage PP had been signed by President Prabowo on Tuesday, December 16, 2025. "Alhamdulillah, the wage PP has been signed by President Prabowo Subianto," said Yassierli, Wednesday, December 17.

The new rules change the previous provisions contained in PP Number 51 of 2023. In Article 26 paragraph (6) of the PP, the alpha range is set at 0.1 to 0.3 points. Through the latest PP, the government has increased the alpha range to 0.5 to 0.9 points.

Yassierli hopes that the wage policy contained in this PP can be a fair and balanced solution for all parties. According to him, the change in the formula is expected to be able to maintain workers' purchasing power while considering the conditions of the business world.

He also asked the governors to determine the amount of the minimum wage increase by no later than December 24, 2025. In the latest PP, the governor is required to determine the provincial minimum wage (UMP) and can determine the district/city minimum wage (UMK).

In addition, the governor is also required to determine the provincial sectoral minimum wage (UMSP) and can determine the district/city sectoral minimum wage (UMSK).

Yassierli emphasized that the policy was a form of government commitment in carrying out Constitutional Court Decision Number 168/2023. In the decision, the Constitutional Court asked the DPR and the government to immediately form a new employment law that is separate from Law Number 6 of 2023 concerning Cipta Kerja.

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The Constitutional Court has given a maximum of two years to the law-makers to complete the new labor law. The Constitutional Court also emphasized the importance of the active participation of trade unions and workers in the drafting process.

"The process of preparing this PP on remuneration has gone through a long study and discussion and the results have been reported to the President," said Yassierli.