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Why should Indonesia adopt hourly wage scheme?
Such a regulation if implemented in Indonesia could potentially reduce the payment load on Indonesian employers, while at the same time ensure the employees are paid in accordance with the minimum wage.
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Workers labor in a cigarette factory in Kudus, Central Java. (Antara/Yusuf Nugroho)
O
ne of the most debated items in the omnibus bill on job creation that is currently being drafted by the government is the hourly wage scheme in which wages are paid to employees on an hourly calculation.
The hourly wage scheme is welcomed by employers, but has met massive protests from workers. The Indonesian Employers Association (Apindo) supports the implementation of an hourly wage scheme in Indonesia.
Apindo chairman Hariyadi Sukamdani said the implementation of the hourly wage scheme would not reduce the number of workers. On the contrary, he said he believed this scheme would have a positive impact, such as expanding job opportunities for workers.
However, the labor union strongly rejects its implementation. The chairman of the Confederation of Indonesian Trade Unions (KSPI), Said Iqbal, offered several reasons why the union rejected such a wage scheme. The reasons are, among others, that the hourly wage scheme might exempt employees from the worker’s safety net program.
The KSPI is worried the implementation of the hourly wage scheme might open up the possibility for employers to pay their employees less than the monthly minimum wage. The employers will have the option to give less working time to their employees.
As a result, employees end up receiving fewer wages than the amount they currently receive as monthly wages.
Furthermore, the KSPI also questions the point of implementing the hourly wage scheme just to attract more investment, if such a wage policy would only cause the workers to suffer.
