Govt delays new ruling on minimum wage<\/p>\n
Ridwan Max Sijabat, The Jakarta Post, Jakarta<\/p>\n
Outgoing Minister of Manpower and Transmigration Jacob Nuwa Wea
\nhas issued a circular delaying the implementation of the use of a
\nmore humane criteria than basic physical needs in determining
\nregional minimum wages until 2006.<\/p>\n
Article 89 of Law No. 13\/2003 on labor, which will take effect
\nin January 2005, stipulates that the provincial minimum wages
\ndetermined by governors shall be determined on the basis of
\n\"humane physical needs\", which is presumed to be far higher than
\nthe minimum basic needs.<\/p>\n
The issuance of the circular means that any wage increase
\nwould be nominal as it mainly aims at offsetting the effects of
\ninflation, not increasing workers' purchasing power.<\/p>\n
The circular, issued last week amid intensive tripartite
\ndiscussions on minimum wages in provinces, said the government
\nhad decided to delay enforcing the labor law due to the prolonged
\neconomic crisis.<\/p>\n
\"The government decides to delay enforcing the new ruling on
\nminimum wages because of continued economic difficulties and
\nbecause workers and employers have yet to submit detailed
\ninformation about humane physical needs,\" Minister Nuwa Wea told
\nThe Jakarta Post here on Tuesday.<\/p>\n
Nuwa Wea said the circular implied that there would be no real
\nincrease in the minimum wages in 2005 and workers should be
\nprepared for such conditions.<\/p>\n
Workers, employers and provincial administrations are
\nconducting intensive tripartite discussions to set the provincial
\nminimum wages for the 2005 fiscal year.<\/p>\n
According to the labor law, the minimum wages shall be
\nannounced to the public in December and will take effect in
\nJanuary the following year.<\/p>\n
A bipartite forum representing workers and employers in
\nJakarta had recently agreed to raise the minimum wage to Rp 1.2
\nmillion (US$130) from the current Rp 671,550, but Minister Nuwa
\nWea called for a review for fear that it would encourage poor
\nprovinces to propose intolerable wage hikes.<\/p>\n
Industrial relations expert Payaman Simanjuntak said the
\nministerial circular was regrettable and not a wise solution for
\nthe conflicting interests of workers and employers.<\/p>\n
He argued that the government could encourage the National
\nWages Research Board to set realistic components of the humane
\nphysical needs to allow major companies to pay their workers at
\nleast in line with the new ruling.<\/p>\n
\"The law has prepared a mechanism for small companies and
\nthose facing financial difficulties to be exempted from the new
\nlaw,\" he said.<\/p>\n
Payaman, who is also former director general of labor
\nindustrial relations and supervision at the Manpower and
\nTransmigration Ministry, said that the minimum basic needs was no
\nlonger an appropriate guide in determining the minimum wages as
\nits components were inhumane and unrealistic.<\/p>\n
Meanwhile, Djimanto, secretary-general of the Indonesian
\nEmployers' Association (Apindo) said on Tuesday that more
\ncompanies would likely close if the new labor law took effect in
\nsuch difficult economic conditions.<\/p>\n
\"We will have no other alternative but to close down or
\nrelocate to other countries if the government enforces the new
\nlaw,\" he said without elaborating.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-delays-new-ruling-on-minimum-wage-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}