Minimum wage applies only to workers with less than one year of service. For those employed longer, their wages should align with the wage scale and structure established at the workplace or factory level.
In March 2023, the Government of Indonesia enacted Law No. 6 of 2023 concerning the adoption of Government Regulation in lieu of the Job Creation Law (PERPU) No. 2 of 2022. This law formally repealed the Job Creation Law No. 11/2020. Derivative regulations of the Job Creation Law remain valid as long as they do not conflict with this new statute.
The Government of Indonesia has promulgated Government Regulation (PP) No. 51 of 2023, amending PP No. 36 of 2021 on wages. This new regulation revises and restructures several provisions concerning Minimum Wage, initially governed under the previous derivative regulation. It maintains the requirement for district and city minimum wages to be issued by competent authorities; introduces a new formula for minimum wage calculation; and grants the Government authority to determine alternative minimum wage formulas under specific conditions.