The minimum wage began to be confused after Ministerial Ordinance No. 18 of 2022 came into effect on November 16th last year, but Cabinet Order No. 2 of 2022 came into effect on December 30th, and the regulations related to the minimum wage have been revised. This Cabinet Order will become invalid unless the next Diet session approves this Emergency Cabinet Order. In addition, the minimum wage amount for 2023 has already been determined, so although there is an issue of the legality of Ministerial Decree No. 18 of 2022, it is now necessary for each company to adjust wages based on the already determined minimum wage amount. Meanwhile, on December 28, the Governor of West Java once again issued regulations regarding the minimum wage for employees with a working period of one year or more in West Java Governor Circular No. 561 of 2022. Companies that have established wage scales are not covered, but the numbers commented on by the state governor will take on a life of their own, so caution is needed.

[Organization of applicable laws and regulations]

Negotiations or decisions on annual wage adjustments in this situation of confusing laws and regulations are subject to various risks. However, workers are looking forward to a decision on wage adjustments based on the new minimum wage that will take effect from January 1st. The first thing that must be done in this situation is to sort out the laws and regulations that each company applies. Not everything that has been enacted must be applied by your company. As mentioned above, the West Java Governor's Circular does not apply to companies that have already established wage scales. Additionally, if the company's minimum wage is already higher than that amount, then the minimum wage has already been applied. Also, the rate of increase in the minimum wage is often talked about, but minimum wage regulations require that the minimum wage be at least equal to or exceed the set amount, and the rate of increase in the minimum wage has no binding force. In this way, what is being talked about in the world and what companies actually need to apply do not necessarily match.

[Labour and management stand on the same playing field]

Once you have sorted out the laws and numbers that a company must apply, labor and management need to be fully aware of them. Explain in detail why this provision does not need to apply, and hold a discussion so that the workers/labor union can come to the same understanding. Have you decided that the labor union will just do what's best and bring in the best features of surrounding companies without really listening to the company's explanations? Of course, there are many labor unions that have this tendency. However, there are some labor unions that will understand if you explain them properly. On the other hand, there may also be requests such as ``I understand that there is no obligation to apply, but''. For example, it is not illegal to ``not make annual wage adjustments because the minimum wage is already higher than the minimum wage,'' but the employer will ask you to ``do something about it'' because ``even though we raise wages every year,'' or ``no company around us doesn't raise wages.'' Non-mandatory annual wage adjustments will be considered according to company policy and competency. In order to find a compromise while maintaining good labor-management relations, it is first necessary to provide explanations on the same level.

Related laws and regulations: West Java Governor Circular No. 561 of 2022, Decree No. 2 of 2022