Minimum Wage for DKI Jakarta in 2011 Set at IDR 1.29 Million

Governor of Jakarta Regulation No. 196 of 2010 on the Minimum Wage for 2011 has been issued in order to raise the minimum wage in the Special Capital Territory of Jakarta (DKI Jakarta).

The minimum wage for 2011 is set at IDR 1,290,000 (one million two hundred and ninety thousand Indonesian Rupiah) per month, according to Article 1, and is binding on all employers under Article 2.

This is an increase of 15.38% from the 2010 minimum wage of IDR 1,118,009. However, it still remains below the cost of living estimate, which stands at IDR 1,401,829.

The possibility of obtaining an exemption exists under Article 3. Employers who are not able to comply with the new minimum wage are able to apply to the Governor, via the Head Office of Manpower, to gain an exemption pursuant to the requirements and procedures set out in Governor of Jakarta Regulation No. 42 of 2007 on the Procedures for the Suspension of the Minimum Wage. The requirements for gaining such an exemption include holding negotiations with the employees and presenting financial records for the past two years that indicate that the employer is unable to pay the new minimum wage.

Failure to comply with the new minimum wage will result in the employer being subject to criminal sanctions as set out in Article 185 (1), as a violation of Article 90 (1), of Law No. 13 of 2003 on Manpower. The sanctions consist of imprisonment ranging from 1 to 4 years, and fines ranging from IDR 100 to 400 million.

For a brief overview of Minister of Labor and Transmigration Circular Letter No. SE.190/MEN/PHIJSK-PJSK/VIII/2010 dealing with the 2010 Idul Fitri Allowances Payment see ILB No. 1486 26 August 2010.

The Regulation was issued on 15 November 2010, with the new minimum wage being effective from 1 January 2011.