On Thursday (15/10), Indonesian Chief Economics Minister Darmin Nasution unveiled the fourth economic stimulus package with a main focus on boosting labor and employment in Indonesia. A key policy in the new package is the fixed formula that will be applied by the government to determine increases in labor wages across the 34 provinces of the Archipelago. The government said it will allow a wage increase, every year, based on the provincial inflation rate and economic growth pace.
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Recently, the Ministry of Manpower issued Regulation number 1 of 2017 on Wage Structure and Scale (New MOM Regulation). The New MOM Regulation is an implementation of article 14(5) of Government Regulation number 78 of 2015 on Wage (Government Regulation). In this column we discuss the wage scale and structure set by the New MOM Regulation.
In previous weeks we discussed the new Ministry of Manpower regulation number 78 of 2015 concerning Wage (New Regulation). We explained the regulations set by the New Regulation related to the wage structure, non-wage and calculation of wage of employees in Indonesia. We also discussed the regulations regarding the payment of wage during absence of employees in Indonesia. In the column of this week we discuss the regulations set by the New Regulation regarding minimum wages and the imposition of fines by the employer to the employee.
In our previous column we have already discussed regulations regarding the wage structure, non-wage and calculation of wages of employees in Indonesia based on the Ministry of Manpower issued regulation number 78 of 2015 concerning Wages (New Regulation). The column of this week is a continuation of the previous column and discusses the other wage regulations set by the New Regulation, which includes regulations regarding payment of wages during absence of the employee.
On October 23, 2015, the Ministry of Manpower issued regulation number 78 of 2015 concerning Wage (New Regulation). The New Regulation is replacing the old regulation number 8 of 1981 concerning the Protection of Wage (Old Regulation). The New Regulation is a far more detailed implementation of regulations concerning wage/salary for employees in Indonesia compared to the Old Regulation and covers more subjects. In this first out of a three series column, we discuss the salary structure, non-wage and calculation of wage.
The number of poor people in Indonesia rose. According to the latest data from Statistics Indonesia (BPS), released today (15/09), there were 28.59 million poor people in Indonesia in March 2015, equivalent to 11.22 percent of the total Indonesian population. In September 2014 Indonesia’s poverty rate stood at 10.96 percent of the Indonesian population, or 27.73 million people. Thus within a time-span of six months, the number of poor Indonesians rose by around 860,000 people. BPS releases data on the country’s poverty level twice per year covering the months March and September.
In mid-September 2013, South Korean tire producer Hankook Tire, conducted the inauguration of its tire plant in Indonesia. The factory is located in Cikarang (West Java) and is the company's seventh production center in the world: two plants in Korea, three in China and one in Hungary. Annual production capacity of the two factories in Korea reached 46.1 million tires in 2013. Meanwhile, the three factories in China have an annual capacity of 30.8 million units each. In Hungary, annual capacity stands at 12.6 million tire units.
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