21 March, 2018
Back in November, the 2018 Jakarta provincial standard minimum wage was set at Rp 3,648,035.82 by virtue of Gubernatorial Regulation No. 182/2017, which entered into effect on 1 January 2018. This marked an 8 percent increase over the standard minimum wage in 2017 (Rp 3.3 million).
The Jakarta administration has now moved to prescribe higher minimum wage rates than the 2018 standard minimum wage in 11 specific sectors. The new sectoral minimum wage rates are set out in Jakarta Gubernatorial Regulation No. 16/2018, which was promulgated on 12 March 2018 but is of retroactive effect to 1 January 2018. Regulation 16/2018 repeals and replaces Jakarta Gubernatorial Regulation No. 20/2017, which stipulated the sectoral minimum wage rates for 2017.
Unlike the sectoral minimum wage rates set out in Regulation 20/2017, which covered only three sectors (Chemicals, Energy & Mining; Metalwork, Electronics & Machinery; and Pharmaceuticals and Healthcare), Regulation 16/2018 covers 11 sectors, each of which is further divided into sub-sectors, with different minimum wage rates applicable to each sub-sector.
It should be noted that the minimum wage rules set out in Regulation 16/2018 apply only to those who have been in employment with their employer for a period of less than one year, while in the case of those who have been in employment for periods of more than 1 year, the parties (employer and employee) may mutually agree on the wage rates payable.
Table 1: Comparison of sectoral minimum-wage rates in 2017 and in 2018 for each subsector
|
Sector & Subsector |
Minimum Wage, 2017 (Rp) |
Minimum Wage, 2018 (Rp) |
|---|---|---|
|
Chemicals, Energy & Mining – Cosmetic materials & Cosmetics – Soap & Household Cleaning Products (including toothpaste) – Cement & Chalk for Construction |
3,475,000
Not Regulated
Not Regulated |
3,760,000
3,830,438
3,760,000 |
|
Metal, Electronics & Machinery – Canning – Musical Instruments – Household & Electrical Equipment |
3,516,000 3,945,000 3,922,750 |
3,726,960 4,288,610 4,264,422 |
|
Automotive – 2- & 3-Wheeled Vehicles – Vehicles of 4-wheels or more |
Not Regulated Not Regulated |
4,492,830 4,492,830 |
|
Insurance & Banking – Insurance
– Sharia Banks – Forex Banks |
Not Regulated
Not Regulated Not Regulated |
3,830,438 (for insurance companies with assets of more than Rp 1 trillion) 3,830,438 3,830,438 |
|
Food & Beverage – Palm-oil (cooking) – Milk – Instant Noodles |
Not Regulated Not Regulated Not Regulated |
3,830,438 3,830,438 3,830,438 |
|
Pharmaceuticals & Healthcare – Pharmaceuticals
– Hospitals |
3,456,422.50
Not Regulated |
3,830,438 (pharmaceutical companies with assets of more than Rp 1 trillion) 3,830,438 (for type A, B & C hospitals) |
|
Textiles, Clothing & Leather – Weaving – Knitted Garments – Regular Footwear |
Not Regulated Not Regulated Not Regulated |
3,685,269 3,655,000 3,720,996.53 (footwear for export & for companies that are not SMEs) |
|
Tourism – Hotel Services |
Not Regulated |
3,830,436 (for 3, 4 & 5-star hotels) |
|
Telecommunications – Cellular Telecommunications Providers – Applications & Software |
Not Regulated
Not Regulated |
3,715,456 (Non-SME)
3,715,456 (Non-SME) |
|
Retail General Retail |
Not Regulated |
3,978,506 (for supermarkets, hypermarkets, wholesalers & dept. stores) |
|
Construction & Public Works – General Operatives – Head Carpenters – Heavy Equipment Operators |
Not Regulated Not Regulated Not Regulated |
158,789 (per day) 173,978 (per day) 185,023 (per day) |
For further information, please contact:
Indra Setiawan, Partner, Ali Budiardjo Nugroho Reksodiputro (ABNR)
isetiawan@abnrlaw.com
