Exclusion of workers from minimum wage setting in Indonesia

Workers, unions, and others have objected to the Indonesian government’s October 2015 elimination of worker and union voices from the official wage-setting process in that country. According to the Jakarta Post, and other media reports, worker demonstrations against the new national wage-setting process have been met with police using violent means – including tear gas and water cannons – to disperse protestors. 

The issue brief below explains how the system in place before October 2015 included worker and union voices in regional wage-setting councils, and how these councils historically provided greater increases for workers than the government’s new national formula provides.  A minimum wage forum in Jakarta on February 4, 2016, explained that the current legal minimums, ranging from $103 to $224 per month are too low to cover workers’ basic needs, and labor unions have formally requested judicial review of the new formula, in an attempt to return workers’ voices to the wage-setting process.

The FLA will continue observing the ongoing legal processes and update members on potential collaboration opportunities to encourage worker- and union involvement in minimum-wage-setting in Indonesia. In the meantime, the FLA emphasizes for companies sourcing from Indonesia that the FLA Workplace Code of Conduct calls for member companies to provide fair compensation for workers.