Labour Law Reform and Minimum Wage policy

15 Jul 2020

The Indonesian government prepared and submitted a series of laws focused on job creation to Parliament. If implemented, the Omnibus Law, or, ‘RUU Tentang Cipta Kerja’, would amend more than 1,000 articles in the existing regulations, including Indonesia’s Labour Law. Throughout 2019, Better Work Indonesia and the ILO, have advocated and provided inputs to key labour policy areas targeted by the Omnibus Law, including policy on minimum wage. The ILO’s proposal to simplify and harmonise Indonesia’s minimum wage system has been discussed with the office of the President, ILO tripartite constituents, key policy institutions and the governor of West Java, Indonesia’s largest province and home to a large part of the sector.

Better Work Indonesia and the ILO have provided comments to the draft Omnibus Law and are officially submitting technical advice and guidance to the government, as per their request. It also seeks to increase the involvement of primary beneficiaries — employers and workers — throughout the process of labour law reform. At the time of writing, the discussion was temporarily suspended given the need for national partners to be fully focused on addressing the COVID-19 pandemic.

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