The new year 2024 has arrived. What will be a headache at the beginning of the year will be the impact of the government's minimum wage setting and the annual wage adjustments at each company. We discussed setting the minimum wage in the previous Labor Consultation Room, but this time we will take a look at the impact of annual wage adjustments made by each company on the wage scale, and the measures that must be taken in conjunction with the wage scale revision.

[Revision of wage scale]

It is a well-known fact that each company must determine its wage scale in a board of directors decision. In recent years, the existence of wage scales and the pros and cons of how they are set have been increasingly pointed out in audits by the Ministry of Labor. Wage scales are created in part because they are mandatory, but in order to confirm the wage situation of each company and aim to pay wages strategically and appropriately, it is necessary to create a wage scale as the basis. I think there are quite a few companies that don't really know what to create, so they create a table using the current minimum and maximum wages for each position, but that doesn't create a usable wage scale. You need to check the market situation and think about how much wages to pay to increase the morale of your employees while maximizing the company's performance. I think that the amount of pay for each position is often determined by a combination of position, ability, and market, and data collection is one of the keys.

Although the wage scale is determined by the Board of Directors' resolution Keputusan Dewan Direksi, we recommend that you keep the table containing the wage amounts on a separate sheet. This is because the Ministry of Labor often requests a copy of the board of directors' decision during inspections, and if it is written in the body of the decision, the amount may go on its own within the Ministry of Labor and may be leaked.

[Wage scale awareness and data leak]

About the wage scale 1 The company has one obligation. It is an obligation to make all employees aware of the pay scale for the group/position to which they belong. If the wage scale is revised, it will be necessary to re-inform the groups/positions for which the wage amount has changed. And we need well-known evidence of that. Increasingly, Department of Labor inspections are confirming this well-known evidence. There are various ways to make information known, such as posting notices, e-mail notifications, writing on pay slips, and verbally notifying the person in question, but there is a risk that notices, e-mails, and pay slips may be leaked. The safest method is to explain the situation orally to each person and then sign a document stating that they have received the explanation, but companies with a large number of employees may not be able to take that kind of effort, so it may be more realistic to use a combination of posting notices for union members and verbal explanations for non-union members. It is important to choose the method that suits each company and keep proper records.