Based on a circular that was issued by Indonesia's Manpower Ministry on 15 October 2018, the Indonesian government plans to raise provincial minimum wages by 8.03 percent in 2019. Provincial governors have up to 1 November 2018 to officially determine the local minimum wage for 2019.

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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.

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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.

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