Different Minimum Wages for Labor Intensive Industries and other Industries

The Minister of Labor and Transmigration (“Minister”) has issued Regulation No. 7 of 2013 on Minimum Wages (“2013 Regulation”).

The main purpose of the 2013 Regulation is to differentiate between the Decent Living Needs (Kebutuhan Hidup Layak – “KHL”) of workers in labor-intensive industries and other industries in general.

KHL is a measure for the monthly living standard requirements for a single worker. The KHL for each of  Indonesia’s 34 provinces differs and consequently review of provincial KHL is carried out by the respective local Provincial Wage Council[1]. The review process is used to determine the variables and exact  living costs standard for each province. At present, the standard KHL is set out in Ministerial Regulation No. 13 of 2012 on Components and Implementation of Achieving the Stages of Decent Living Needs.