UMP 2024, Puan Asks For Employee Contribution Factors To Be A Priority Consideration

Photo by Rio Lecatompessy on Unsplash

JAKARTA - Chairman of the Indonesian House of Representatives, Puan Maharani, highlighted the increase in the 2024 Provincial Minimum Wage (UMP) which will use a new calculation formula from the Government. In the new regulation, the amount of the UMP increase will be calculated by the provincial wage council through the approval of the regional head or governor.

Through this new regulation, the calculation of wages will use 3 variables, one of which is a certain index determined by the Regional Wages Council by taking into account the level of labor absorption and average wages.

"For this reason, I advise all regional heads to make the contribution of workers a priority consideration in calculating the upcoming UMP," said Puan, Thursday 16 November.

The Ministry of Manpower issued a new regulation regarding wages, namely Government Regulation No. 51 of 2023. This regulation is a revision of PP No. 36 of 2021 concerning Wages, and will come into effect on 10 November 2023.

Through PP No. 51/2023, certainty of an increase in the minimum wage for workers is now obtained through the application of the Minimum Wage Formula which includes 3 variables, namely inflation, economic growth and a certain index (symbolized in the form a).

The specific index as intended is determined by the Regional Wage Council which will be submitted to the governor. Apart from that, other things to consider are factors that are relevant to employment conditions.

Puan hopes that each region will find an increase in value that is in line with workers' expectations. Because increasing wages for workers is a form of their appreciation for Indonesia's economic development.

"A wage increase is very important as a form of appreciation for the hard work and efforts of workers to build the country's economy so that it continues to improve every year. This needs to be appreciated by increasing the minimum wage," said Puan.

By calculating these three variables, the former Coordinating Minister for Human Development and Culture believes that each regional government can accommodate workers' needs in a balanced manner. Moreover, said Puan, the new regulations prioritize a fair structure and wage scale.

"So that companies will not be burdened and will actually increase employment. So job opportunities will become more open and the unemployment rate can be reduced," said the first woman to serve as Chair of the Republic of Indonesia's DPR.

Furthermore, Puan assessed that increasing wages based on worker performance and regional income would also provide a stimulant in increasing purchasing power. This can be one of the factors driving the country's economy.

"UMP calculations that are in line with workers' expectations and the capabilities of employers will increasingly motivate productivity and increase people's purchasing power," explained Puan.

Therefore, Bung Karno's granddaughter encouraged local governments to ensure the implementation of a fair wage structure and scale in accordance with the mandate of PP No. 51/2023. Of course, continued Puan, by involving input from workers and companies.

"Determination of Provincial Minimum Wages and Regency/City Minimum Wages must be carried out in accordance with applicable regulations and prioritize the specified deadlines without ignoring the fate of the workers themselves," she said.

The provincial minimum wage is determined by Governor's Decree and announced no later than November 21. Meanwhile, district/city minimum wages are determined by Governor's Decree and announced no later than November 30. The increase in the UMP must take effect on January 1 2024.

Lastly, Puan hopes that the number of increases in the UMP in each city and district in Indonesia will prioritize justice and welfare for workers.

"Now it is still in the calculation stage, hopefully the number will be in line with expectations based on an attitude of justice and welfare so that there will no longer be disparities in wages between regions," concluded Puan.