YOGYAKARTA - Check the Minimum Wage in Indonesia. The minimum fee is the lowest monthly fee set annually as a safety net in an area.
Its determination is always awaited because regulations prohibit employers from paying workers' wages lower than the minimum wage.
Find more information regarding the mechanism for determining the UMP here.
Lack of information about the minimum wage often triggers misunderstandings or problems for workers. For that, we need to analyze more about what is minimum wage, and the minimum wage setting mechanism.
Let's learn more about Minimum Food.
The minimum wage is the lowest monthly fee set annually as a safety net in an area.
The minimum limit is the lower limit of payment points because regulations prohibit employers from paying workers' fees lower than the minimum fee.
The minimum fee can be determined in the province or we often hear it as the provincial minimum fee or determined in the Regency/City called Regency/City Minimum.
Based on Article 23 paragraphs (1) and (2) of Government Law Number 36 of 2021 concerning Wages (PP 36/2021), the minimum fee as referred to is the lowest monthly break, consisting of:
Article 25 PP 36/2021 regulates the minimum wage set based on economic conditions and employment including purchasing power parity (equilibrium shopping ability), labor absorption rate, and median wages (the permit is between 50 percent highest wages/payments and the lowest 50 percent of employees in certain positions or jobs). Economic growth data, inflation, purchasing power parity, labor absorption rates, and median wages come from authorized institutions in the field of statistics.
Types of Minimum Wage
Article 25 paragraph (1) PP 36 of 2021 states that the minimum wage consists of the provincial minimum wage, and the district/city minimum wage with certain conditions. The following is an explanation of the type of minimum wage:
The Minimum Propinition (UMP) Wage is a minimum that applies to all regencies/cities in one province, which must be determined by the Governor each year ( ARTICLE 27 paragraph (1) PP 36/2021)
The Regency/City Minimum Wage is a temporary minimum in the Regency/City Region. PP 36/2021 states that the Governor can determine the minimum price of regencies/cities with certain requirements (article 30 paragraph (1) PP 36/2021)
Certain conditions referred to are related to:
The average Regency/City economic growth in question for the last 3 (three) years from data available at the same time period, is higher than the average provincial economic growth; or
The point of economic growth is reduced by regency/city inflation in question for the last 3 (three) years from the data available at the same time period, always positive, and higher than the provincial points.
In the event that certain requirements as referred to above are not fulfilled, or in other words, the minimum payment for regencies/cities is no higher than the provincial minimum fee, therefore the governor cannot use the minimum fee for regencies/cities.
Provincial Minimum Wage (UMP)
UMP adjustment is determined at a certain point interval between the minimum upper and lower limits on the area concerned, with the following formula and steps:
1. Establish a minimum fee upper limit or reference the highest minimum fee points that can be determined and calculated to apply the formula as follows:
Upper limit UM = (Ratu - average consumption per capita x Rata - average number ART) : (Rata - average number of ARTs working in each household)
Certificate:
The average per capita consumption is the average per capita consumption per month calculated from the national socio-economic survey in March every year.
The average number of ARTs is the average number of household members calculated from the socio-economic survey in March each year. ART stands for Household Members.
The average number of ARTs works in each household, namely the average number of people working per household, which is calculated from the socio-economic survey of the national month of March every year.
2. Determining the lower limit of the minimum wage or reference for the lowest minimum wage value that can be determined and calculated using the following formula:
UM lower bound = upper limit UM x 50%
3. Determining the value of a certain minimum wage, calculated based on the formula for adjusting the value of the minimum wage as follows:
UM = UM(t) + {Max(PE,Inflation) x [(top top - UM(t)) : (upper top - Lower bound)] x UM(t)}
Certificate:
UM(t) is the minimum wage for the current year
Max(PE, Inflation) is the maximum function of economic growth or inflation, which is one of the highest values of economic growth or inflation. Max stands for maximum. PE stands for Economic Growth.
PE is the economic growth of the province calculated from economic growth which covers the period in the fourth quarter of the previous year and the period in the first, second and third quarters of the year (in percent).
Inflation is provincial inflation calculated from the September period of the previous year until the September period of the current year (in percent).
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