Labour Minister: 2027 Minimum Wage Increase Formula Awaits Labour Protection Bill Results

The Minister of Manpower, Yassierli, has stated that the formulation for the 2027 minimum wage increase is still awaiting the results contained within the Labour Protection Bill.

“The formulation will depend on the results written in the Labour Protection Bill. We will use that as a basis, and then we will collectively examine its implications for existing regulations,” the Minister said when met in Jakarta on Friday.

He noted that the Bill will serve as one of the foundations for calculating minimum wage increases, alongside influencing factors such as inflation.

“Therefore, we will see to what extent the formula is regulated in the law, and then we will use that as our basis (for inflation calculations),” Yassierli added.

“So, for now, our focus is on the Labour Protection Bill. If there are stakeholders, whether from labour unions or industry, who convey their aspirations, we will accommodate them,” said Yassierli.

Previously, the Indonesian Confederation of Trade Unions (KSPI) and the Labour Party proposed a minimum wage increase for 2027 of between 7.5 per cent and 9.5 per cent.

This proposal applies to both Provincial Minimum Wage (UMP) and Regency/City Minimum Wage (UMK), taking into account differences in inflation and economic growth in each region.

The Draft Law (DIM) submitted to the House of Representatives (DPR) contains input from the government, labour, and employers to serve as material for drafting the Labour Protection Bill.

Meanwhile, the Labour Protection Bill was previously approved as an initiative of the House of Representatives during a Plenary Session on 7 August 2026 and has been included in the 2025-2029 National Legislative Program (Prolegnas).