Client Newsflash

Additional Sectors Covered under 2014 Sectoral Minimum Wage for DKI Jakarta

The Governor of DKI Jakarta Province stipulated new sectoral minimum wages (“UMSP”) in Governor Regulation No. 54 of 2014 dated April 17, 2014, and Governor Regulation No. 62 of 2014 dated April 28, 2014, on Provincial Sectoral Minimum Wage (together, the “UMSP Regulation”). The UMSP Regulation stipulates 16 industries and sectors that have to comply with the UMSP:

1. Cosmetic materials and products industry*
2. Automotive industry
3. Can packaging industry*
4. Pharmaceutical industry
5. Radio, television, voice and picture recording devices industry*
6. Household electrical appliance industry*
7. Hospital services*
8. Construction and public works
9. Chemicals, energy, and mining
10. Metals, electronics, and machinery
11. Insurance and banking
12. Food and beverages
13. Textiles, clothing, and leather
14. Tourism
15. Telecommunications
16. Retail
*newly added for 2014

The UMSP Regulation stipulates 2 types of UMSP: monthly and daily. The lowest monthly UMSP applies to the cosmetic materials and products industry, with a UMSP of Rp2,525,000, and the highest monthly UMSP applies to the automotive industry sub sector of four wheel vehicles, two wheel vehicles, and transportation and heavy vehicles industry, with a UMSP of Rp2,915,000. The lowest daily UMSP applies to the construction and general contractor industry, with the lowest UMSP applied to workers (knek), mower men (tukang babat rumput) and plumbers (tukang pasang pipa) with a UMSP of Rp102,920 per day, while the highest daily UMSP applies to Supervisors and operators of heavy equipment, with a UMSP of Rp157,901 per day.

It is mandatory for every employer in DKI Jakarta Province that engages in the foregoing sectors to comply with the UMSP for all employees whose tenure is less than 1 year, in accordance with Article 90 of the Labor Law and the UMSP Regulation. If the tenure is more than 1 year, the monthly or daily salary shall be determined through bipartite negotiation between the employee or authorized labor union and the employer.

May 21, 2014

The foregoing material is the property of AKSET Law and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor should it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.

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