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Recently, Jakarta Governor's Regulation no. 20 of 2017 regarding the Minimum Wages for the Industrial Sector (Regulation 2017) was issued. The minimum wages for the industrial sector are set on annual basis. Regulation 2017, replaces and repeals Governor Regulation no. 8 of 2016 (Old Regulation). In this column we discuss the new wages set by the Regulation 2017 for each specific industrial sector in Jakarta.
Industrial Sectors in Jakarta
Under the Old Regulation, the minimum wage was set for the following sectors:
- Chemicals, energy and mining;
- Metal work, electronics and machinery;
- Pharmaceuticals and health services;
- Construction and public works;
- Insurance and banking;
- Food and beverage;
- Textiles, apparel and leather;
- Telecommunications; and
The scope of the Regulation 2017 is however limited to only industrial sector 1, 2 and 3 of the above list. For these three sectors, it regulates far less sub-sectors than the Old Regulation. The sectors and sub-sectors not regulated anymore in the Regulation 2017, will need to comply with the general minimum wage as set in Governor Regulation number 227 of 2016.
The Regulation 2017 sets the following minimum wages:
- Cosmetics materials and cosmetics: IDR 3,475,000
- Metal work, electronics and machinery
- Canning: IDR 3,516,000, for PT PMA companies and large sized PT companies
- Music instruments: IDR 3,945,000
- Ship repairs and modifications: IDR 3,550,000
- Radio, television and audio-visual recording devices: IDR 3,922,750, for PT PMA companies and large sized PT companies
- Pharmaceuticals: IDR 3,456,422.5, if the total asset amount is more than one trillion rupiah
It is important to note that above minimum wages only apply to workers who have been working for a period of less than one year. For workers which have been working for more than one year, the wages are determined based on bilateral negotiations between the workers and the company.
The Regulation 2017 is in force since February 28, 2017.
This column is provided by PNB Law Firm Jakarta