The regulation sets the minimum wage increase as inflation plus economic growth multiplied by an alpha factor ranging from 0.5 to 0.9 points, replacing a narrower range under the previous rule.
“Alhamdulillah (Thank God), the wage regulation was signed by President Prabowo Subianto on Tuesday,” Labour Minister Yassierli said in a statement received in Jakarta on Wednesday.
The new rule revises Government Regulation No. 51 of 2023, which had set the alpha factor at 0.1 to 0.3 points under Article 26, paragraph six.
By widening the alpha range, the government aims to provide greater flexibility in adjusting wages in line with economic conditions, Yassierli said.
“We hope this wage policy will be the best solution for all parties,” he added.
Yassierli urged provincial governors to determine minimum wage increases no later than Dec. 24, 2025, in line with the new regulation.
The rule requires governors to set provincial minimum wages and allows them to establish district and city minimum wages.
Governors must also determine sectoral minimum wages at the provincial level and may set sectoral minimum wages for districts and cities, Yassierli said.
He said the regulation reflects President Prabowo’s commitment to implementing Constitutional Court ruling No. 168/2023.
The court ordered lawmakers and the government to draft a new manpower law, separate from the 2023 Job Creation Law, within two years and with active participation from labour unions.
Yassierli said the wage regulation followed lengthy studies and consultations and its results had been reported to the president.
Separately, Indonesian Chamber of Commerce and Industry chairman Anindya Novyan Bakrie called for balance between worker welfare and business sustainability in setting the 2026 provincial minimum wage.
In his statement on Tuesday, Anindya said the wage decision should strengthen communication among government, employers and workers to maintain healthy industrial relations.
“The most important thing is to sit together so labour relations remain good, while businesses continue to grow and stay competitive,” he said.
Last year, minimum wages rose by 6.5 percent, accompanied by assistance and incentives for workers.
The government also provided discounts on workplace accident and job loss insurance contributions.
Job loss benefits were increased to 60 percent of salary for six months, aimed at helping workers during employment transitions.
Related news: Minister ensures no minimum wage reduction despite negative growth
Related news: Dy Minister discusses new minimum wage formula with labor unions
Translator: Putu IS, Rahmad Nasution
Editor: Primayanti
Copyright © ANTARA 2025
