Page 95 - e-KLIPING KETENAGAKERJAAN 5 NOVEMBER 2020

"Our suggestion is based on facts, data and our own calculations. We suggest that the 2021
minimum wage should stay unchanged as the pandemic has caused businesses to struggle to
pay their employees," he said during an online press briefing.

He said the calculation was based on Government Regulation (PP) No. 78/2015 on wages, which
included a formula to calculate the next year's minimum wages that accounted for inflation and
economic growth.

Manpower Minister Ida Fauziyah issued a circular on Oct. 26 instructing regional administrations
to maintain the 2020 provincial minimum wage (UMP) for 2021.

Manpower Minister Ida Fauziyah under fire for maintaining minimum wage for 2021 The decision
was met with protests by labor unions demanding an increase in next year's minimum wage.
The unions argued that at least 11 business sectors had not been affected by the COVID-19
pandemic, including energy, electronics and pharmaceuticals.

Apindo also criticized the decisions of several regional administrations to increase their provincial
minimum wage despite the Manpower Ministry circular.

"We deeply regret their decision as they are insensitive to what we [business players] are going
through during this pandemic," said Hariyadi.

Several regional administrations, such as Central Java, Jakarta, East Java and Yogyakarta, have
announced that they will raise next year's minimum wage.
Hariyadi also criticized Jakarta Governor Anies Baswedan's decision to have businesses impacted
by the pandemic to submit a request to waive the wage increase.

The requirement was too complicated, he said, and added bureaucratic hassle.

National Wage Council (Depenas) vice chairman Adi Mahfudz added that the minimum wage had
been widely misunderstood in Indonesia as many assumed it would be used as a base for
businesses to pay for their employees' wages.

"The minimum wage is merely a social safety net for businesses to pay for single, inexperienced
employees and is not applicable to experienced employees," he said.

He also dismissed rumors about a deadlock between businesses and labor representatives
regarding the minimum wage, saying that all parties that were present during the national
dialogue on the 2021 minimum wage had agreed to leave the wage unchanged next year.

Indonesian Chamber of Commerce and Industry (Kadin) vice chairman on manpower and
industrial relations Anton J. Supit said labor unions should focus on educating workers about
negotiating pay with their employers to get wage increases.

"We should also focus on developing the labor force's skills so that we can compete with other
countries in the region," he said.

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