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View all search resultsGovt rolls out minimum wage rule late, drawing union ire
Provincial leaders must then determine the size of next year’s minimum wage increase no later than Dec. 24
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Loud and proud: Demonstrators react as the music pauses during a labor rally calling for better working conditions on Oct. 30, 2025, near the National Monument (Monas) park in Central Jakarta. (AFP/Yasuyoshi Chiba)
P
resident Prabowo Subianto has signed a new government regulation on wages that will serve as the basis for setting minimum wage increases in 2026, the Manpower Ministry revealed, just before the turn of the year.
The regulation introduces a new formula for calculating provincial minimum wages, combining inflation with economic growth multiplied by a factor known as alpha. The figure represents an index reflecting labor’s contribution to economic growth within a specified range.
The alpha coefficient for next year ranges between 0.5 and 0.9, the statement said.
“Alhamdulillah [praise be to God], the wage regulation has been signed today by President Prabowo,” the ministry said in a statement issued on Tuesday, adding that the rule followed lengthy studies and consultations that had been reported to the president.
Under the regulation, regional wage councils will calculate proposed minimum wage increases using the new formula and submit their recommendations to regional leaders. Provincial leaders must then determine the size of next year’s minimum wage increase no later than Dec. 24.
The rule also requires governors to set provincial minimum wages and allows them to establish sectoral, district and city minimum wages.
“Hopefully, the new wage policy will strike a balance between the interests of workers and businesses and provide greater certainty in wage-setting across regions,” the statement added.
