Companies told to honor minimum wage ruling

TANGERANG (JP): All companies here have been reminded of their obligation to abide by the government's ruling governing an increase in monthly regional minimum wages by an average of 16.7 percent as of April 1.

Head of the Tangerang office of the Ministry of Manpower Apon Suryana said on Saturday that those unable to raise wages were required to ask permission for a postponement.

However, they had to back their requests with a number of requirements, including the approval of 50 percent of all the firm's workers and the balance sheet for the last two months, Apon said.

The management should also submit projections for their production over the next two years, he said.

"The maximum duration of any wage increase postponement is one year," he said.

Under the ruling, the basic monthly minimum wage in Greater Jakarta, encompassing Jakarta, Bogor, Bekasi and Tangerang, will increase to Rp 231,000 from Rp 198,000.

Apon reiterated that those failing to comply with the ruling could be charged with violating Article 17 of Law No. 14/1969 on employment, and face a maximum sentence of three months in jail or a fine of Rp 100,000.

Kusnanto, deputy secretary to the Tangerang chapter of the Federation of All-Indonesian Workers Unions, said that the planned increase would be beneficial to workers amid the current economic crisis regardless of whether the firms' owners agreed with it or not.

The government's decision, announced last month, was made with the aim of arresting the decline in real wages caused by the economic crisis, where the purchasing power of workers would continue to weaken and the labor situation to further deteriorate if such a decision were delayed.

Many companies have demanded that introduction of the government's policy be postponed, Kusnanto said, but declined to give details.

Meanwhile, the government decision governing the wage increase was warmly welcomed by workers, who hoped that the raise would enable them to catch up with the steadily increasing prices of basic commodities.

Sakir, a father of three living in the Pasar Kemis area, however, expressed fear that the wage increase would also trigger a hike in the prices of necessities.

"The price of rice is too high at present," said the worker who lives with his family in a house he rents for Rp 90,000 per month.

Yuyun, a worker in a garment factory, echoed Sakir's remarks, adding that the current security condition was not favorable either. "Riots erupting in many parts of the country scare us," she said.

"If the wage increase is followed by a rise in the prices of essential goods, it will not mean anything," Yuyun said.

The decision has also drawn mixed reactions from owners of companies with some saying they were ready to abide by the ruling and some others saying they would wait and see.

Ismail, the general manager of tire manufacturer PT Gajah Tunggal, said that management did have choices other than raising wages. "But we are ready to raise them anyhow," he said.

Each of the 12,000 workers employed by the firm already gets above the Rp 231,000 per month for a five-day working week, he said.

Absori of shoe producer PT Dong Djoe Indonesia also said that the wage increase was no longer a problem for his company as workers wages already stand at Rp 250,000 per month, not including increments.

The management of PT Surya Toto Indonesia, a producer of sanitary products, was still in the process of negotiating with its workers.

"We are still negotiating and no agreement has been reached yet. But in principle we agree to comply with the ruling," Junaidi, the firm's general manager, said. (41/hhr)