New Regulation on Minimum Wage Formulation

Government Regulation No. 78 of 2015 on the Minimum Wage (“2015 Regulation”) is an implementation of Article 97 of Regulation No. 13 of 2003 on Labor Affairs.[1] An integral part of phase IV of the government’s economic-policy package, the 2015 Regulation aims to create a standard formula for the determination of minimum wage across all regions of the country.

Businesses throughout Indonesia will thus have guidelines to consult when determining any increase in the minimum wage over the following year. Prior to the 2015 Regulation, this same matter was regulated under Government Regulation No. 8 of 1981 on Wage Protection (“Previous Regulation”).