Employers need time to adjust to wage hikes

Employers need time to adjust to wage hikes

JAKARTA (JP): An association representing employers is calling
on the government to give them more notice next time it hikes the
minimum wage levels.

APINDO, an employers association, said many of its members
were caught unawares by the increases enforced in virtually every
province across Indonesia since the beginning of the year.

APINDO chairman Suratmo Hadisuwito said that while employers
were adjusting their cost structure, very often workers refused
to wait.

They would then undertake a labor action, such as strikes, to
press for their rights, he said, addressing a hearing with the
House of Representatives (DPR) on Tuesday.

"Employers should be given at least a three-month notice to
allow them to adjust to the new minimum wage levels," Suratmo
said.

He recalled that last November, a tripartite board of
employers, workers and government representatives in West Java
agreed to raise the minimum daily wage to Rp 3,800 from Rp 2,600,
to be made effective April 1.

But Minister of Manpower Abdul Latief, who gives the final go-
ahead on such rulings, decided that the new minimum wage should
be introduced as of Jan. 1.

The government should take into consideration the interest of
employers as well as workers, he said.

Latief, a successful businessman before being recruited by
President Soeharto himself in March of last year, sees himself as
the champion of the workers' cause. He has shown no hesitation in
the past to criticize his former business colleagues for failing
to meet the basic rights of workers.

His move to raise the minimum wage levels in Jakarta and West
Java caused some consternation among employers, as they had to
deal with workers going on strike to demand the lawful increase
of their wages.

The government has announced plans to hike the minimum wages
in many other provinces beginning on Aug. 1, this time announcing
the new levels well in advance.

Endorsement

Responding to APINDO's complaints, Oediyanto of the Armed
Forces faction agreed that the final endorsement for hiking the
minimum wage should be in the hands of the provincial governments
and not the minister. This was because the provincial governments
had a better understanding of the conditions of their areas.

Apindo Deputy Chairman Rienaldo Thamrin, who accompanied
Suratno, said that now that the minimum wage levels in most
regions had reached, or almost reached, what is needed to meet
the minimum physical requirements, future increases should be
tied to productivity.

When a legislator asked whether APINDO considered the minimum
wages humane, Thamrin answered it with a question. The deputy
chairman asked if the salary system in the public sector was
fair, alluding to the fact that civil servants are among the
lowest paid profession in Indonesia.

"Sure the minimum wage levels are relatively low ... But the
prolonged economic difficulties have also resulted civil
servants' pay falling behind the inflation rate," he pointed out.

He also stressed that APINDO has no authority to compel its
members to abide by the minimum wage regulations.

"We're not an enforcement agency. We were created to fight for
the interest of the members that includes creating a conducive
atmosphere for investors," he said.

Minister of Manpower Abdul Latief said on Tuesday that his
office has filed with complaints against 50 companies in Jakarta
for violating various labor regulations, including on the minimum
wage.

In addition, the courts in Medan (North Sumatra) and Surabaya
(East Java) have penalized eight companies for similar
violations.

The number of offenders has been declining, he said, referring
to the fact that there are now greater compliance among companies
on minimum wage regulations. (rms/emb)