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​The Updated Regulation of Minimum Wage Increment of Jakarta Province in 2022

Posted 6 months ago by JAC Consulting

Payroll Still Life With Cash High Angle

A business's stakeholders will always have an obligation to keep their workers in good health and wealth by providing a good wage and facilities. It is a fact that a fair salary attracts and maintains high-skilled employees, or in another way, motivates employees to try and learn to be better every day. Hence, a company should provide a salary that complies with government regulations. 

 The Governor of DKI Jakarta (Anies Baswedan) recently decided to revise the policy upon increasing wage workers in Jakarta in 2022. At first (19 Nov' 2021), it was agreed that the minimum wage of Jakarta's workers in 2022 would be around IDR 4.4 million or 0.85% higher than 2020. Meanwhile, in December 2021, Anies Baswedan decided to publish another decree as a revision, where the minimum wage of Jakarta Province will be around IDR 4.6 million in 2022. 

 The decision caused many objections and criticism. As the revision was published, the Governor of DKI Jakarta was accused of violating Government Regulation Number 36 of 2021 Regarding Wages because it is not included as a reference in the new decree Baswedan Published in December. The calculation upon wages should not be decided single-handedly, especially not considering specific policies to pass it through. 

 As the regulation was signed, the debate upon this decision started to appear publicly. An increment in wages is a response to a demonstration done by Indonesia Trade Union Confederation (KSPI), where the increment published in November is considered too small to be called specific. Therefore, the increment published in December was welcomed very well. The president of KSPI, Said Iqbal, stated that Anis' decision is "politically brave." 

On the other hand, companies, entrepreneurs, and numerous parties in the Government of Indonesia stated that Anis' decision was "disappointing" and "not well calculated." Indonesian Business Association (APINDO), as a party representing companies and business people in Jakarta, has shown their disappointment and criticism upon Anies Baswedan. Nurjaman, as a Vice Chief of Jakarta Province Representatives, questioned why the Governor of DKI Jakarta would revise some regulation that is already precise. 

The objection also lay upon the prohibition to pay employees' salaries less than the mentioned number in Governor Decree last December, which burdens companies even more. Other than that, to do an increment of wage in the pandemic is not the best option any company would choose to do. Many members from APINDO are still struggling to survive their existence of business in this era. APINDO planned to file a lawsuit upon Anies Baswedan for publishing a decree single-handedly and violating Government Regulation Number 36 for the Year 2021. 

 In the middle of debates and confrontation, Anies Baswedan's decision to increase employees' minimum wage in 2022 has been supported by the Department of Manpower, Transmigration, and Energy of DKI Jakarta Province by publishing decree number 3781 the year 2021 regarding Minimum Wage Implementation Guidelines. Two major points shall be noted on this decree. First, companies and entrepreneurs are directed to do fulfillment of the new minimum wage. Second, companies can apply for adjustment if they show their proof of loss from January to November 2021 and January to December 2020. This latest decree shall guide the company and entrepreneurs regarding employees' salaries in 2022. 

 Even though the decision to increment employees causes much debate, this latest decree shall be the guide company and entrepreneurs should comply regarding the employee's salary in 2022. Overall, the controversy between the pro side and the contrary side of the increment is interesting to observe.

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