2024On October 31, 2023, a portion of Law No. 6 of 2023 was ruled unconstitutional. Since Article 21 has been determined to be unconstitutional, that article will become invalid under the law as of the date of this unconstitutional ruling. On the other hand, the Constitutional Court does not have the authority to establish laws and regulations, so the government is required to formulate new laws and regulations based on this judgment, but until a new law is enacted, the laws and regulations that were in effect before Law No. 6 of 2023 will remain in effect.

[Unconstitutional part regarding minimum wage provisions]

Among the provisions that were ruled unconstitutional, the provisions related to minimum wages are subject to the 2023 Law No. 6 issue number 88 Articles 1 item, item 2 Article 88c, Article 88D, Article 88F, Article 90A, and Article 98(1). This time, 21 articles were ruled unconstitutional, so one-third of them are related to minimum wages.
Of particular note are the formula for calculating the next year's minimum wage and the sectoral wage calculation. 2 I think it is. Both of these two points were major changes in the Omnibus Law, which can be said to be the predecessor of Law No. 6 of 2023, and the Employment Creation Law, Law No. 11 of 2020. Many companies are fearful of reverting to the old law.
Currently, the state minimum wage, which should have been announced by November 21st, has not been published to date. There was information that the announcement would be made after President Prabowo returned from his overseas trip, but it is currently unclear when, in what form, and what kind of numbers will be released.

[What should I do now]

God only knows what changes will be made in the future, but considering the various movements related to setting the minimum wage to date, there is no doubt that the setting will be delayed. And even if the new minimum wage is delayed, it is probably safe to say that the new minimum wage will become effective from January 1, 2025. Even if the setting is announced after January 1, 2025, there is a very high possibility that it will be retroactive, as there have been many similar cases in the past. First of all, we will have no choice but to wait for the minimum wage to be released in the future.
There are also many concerns, such as how the inflation rate and GDP rate will affect the calculation formula, and whether sectoral wages that have disappeared will be restored, but in any case, we have no choice but to wait for a decision. There have been reports that President Prabowo has ordered the calculation formula to be changed, and a federation of labor unions has gotten carried away and is threatening to hold large-scale demonstrations if the minimum wage is not changed. It's unfortunate that the labor sector in Indonesia seems to be going backwards, but I think it's best not to panic and to distance yourself from the voices of your company's labor union by saying, ``We'll wait until the regulations come out, and then once the regulations come into effect, the company will comply with the law.'' Indonesia is supposed to be a country ruled by law, but when it comes to moves like this, there are places where the ideal state of establishing laws and regulations and adhering to them is not being valued. If you change something in a hurry because you are confused by your own imagination about something that has not been decided yet, you may be in trouble later, so you need to be able to carefully assess the situation.