Page 174 - e-KLIPING KETENAGAKERJAAN 6 OKTOBER 2020

“We’ve [issued] a vote of no confidence. The people demand an end to the deliberation and a
cancellation of the job creation bill. The government and House have betrayed the people and
the 1945 Constitution,” the coalition said in a written statement on Monday.

As companies have fallen into financial difficulties during the pandemic, the unions have
expressed concerns that the law would make it easier for businesses to lay off workers.

Among the points that have been agreed is abolishing the sectoral minimum wage (UMSK) by
only recognizing the provincial minimum wage (UMP) and regency or municipality minimum
wages (UMK).

According to the law’s Article 88C, governors can set their region’s minimum wage at provincial
and regency or city level in line with the area’s inflation and economic growth rate.

The government and lawmakers have also agreed to lower maximum severance pay for laid off
workers and introduce a new unemployment fund (JKP), which effectively means the government
will shoulder part of the company’s cost when they lay off their workers.

According to the law, employers could pay a maximum of 19 times the monthly salary, and an
additional six times the monthly salary will be paid by the government through the JKP scheme.

The JKP scheme will be managed by the Workers Social Security Agency (BPJS Ketenagakerjaan).
Article 46E of the law stipulates that the source of funds for the JKP scheme, which currently has
yet to be established under the country’s social security system, will come from the government,
workers’ premiums and BPJS Ketenagakerjaan operational funds.

The law also stipulates that BPJS Ketenagakerjaan is set to receive Rp 6 trillion (US$405.41
million) from the state budget to run the JKP scheme, but there have been no guarantees that
the funds will be disbursed for those who will face termination immediately.
Caption:

New law: Coordinating Economic Minister Airlangga Hartarto ( right) receives a final report from
House of Representatives Legislation Body (Baleg) chairman Supratman Andi Agtas during the
House’s plenary session to approve the omnibus bill on job creation at the House’s compound in
Central Jakarta, on Monday.

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