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Omnibus bill on job creation divides unions, faces criticism
Jokowi wants the deliberations to conclude within 100 working days after the bill’s submission.
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Labor unions march toward the House of Representatives Building in protest of the omnibus bill on job creation in Jakarta on Jan. 13, 2020. (JP/Moch. Fiqih Prawira)
T
he government is set to reform the country’s labor regulations through a sweeping omnibus bill on job creation, in the face of workers’ objections and criticism from economists and businesspeople over several of the proposed bill’s provisions.
According to a draft obtained by The Jakarta Post on Wednesday, the government-initiated bill will ease foreign-worker recruitment, cap redundancy payments for laid-off workers and provide a bonus, described by some as a “sweetener”, for employees.
The government will also relax outsourcing requirements and open the possibility for outsourcing agencies to hire workers for various jobs, which can be for freelance or full-time work.
It also introduces a new regional minimum wage that takes into account a region’s economic growth and allows labor-intensive industries to have a separate minimum-wage calculation determined by the governor of the respective provinces.
Micro and small businesses, however, are exempted from the minimum-wage stipulations but are required to pay their workers a salary higher than the poverty-line level.
Read also: Key points of labor reform in omnibus bill on job creation: What we know so far
"This will result in lower wages because several regions recorded negative growth and thus it will further weaken purchasing power,” National Welfare Movement (Gekanas) head of advocacy, Saeful Anwar, said. “A minimum wage based on regional economic growth could widen inequality.”
