Manpower Minister Yassierli said regional administrations should be able to complete the process within a week, as procedures largely mirror previous regulations, easing coordination between central and local authorities.
“The Regional Wage Council will submit its proposal to each regional leader, which will then be officially set by the governor. The deadline is Dec. 24, 2025,” Yassierli told reporters in Jakarta on Wednesday.
Minimum wages will continue to be calculated using inflation plus economic growth multiplied by an alpha coefficient, he said, describing the formula as familiar to wage-setting bodies across the country.
Under the new government regulation, the alpha range has been increased to between 0.5 and 0.9 points, compared with the previous range of 0.1 to 0.3 points.
“So only the alpha value has changed,” Yassierli said, adding that the adjustment was intended to better reflect economic conditions and workers’ purchasing power.
Related news: Prabowo signs new minimum wage formula, raises adjustment factor
To keep the process on schedule, the Ministry of Manpower is assisting several provinces that need technical support in determining wage levels, while also conducting outreach to regional leaders.
Under the regulation, governors are required to set provincial minimum wages, known as UMP, and may also establish district or city minimum wages, or UMK, based on local conditions.
Governors are also mandated to set provincial sectoral minimum wages, or UMSP, and may determine district or city sectoral minimum wages, known as UMSK.
Yassierli said the policy aims to balance worker welfare with business sustainability, while providing clearer guidance to regional administrations and employers.
“We hope the wage policy outlined in this government regulation will be the best possible policy for all stakeholders,” he said.
President Prabowo Subianto earlier signed the regulation on minimum wage adjustments, formally introducing the revised formula and higher alpha range.
The rule amends Government Regulation No. 51 of 2023, which previously capped the alpha coefficient at 0.3, effectively limiting annual wage increases.
By raising the range to 0.5–0.9, the government expects regional wage growth to better track inflation and economic expansion.
Officials said timely wage setting is critical to provide certainty for workers and businesses ahead of 2026 planning cycles.
Related news: Dy Minister discusses new minimum wage formula with labor unions
Translator: Putu Indah, Kuntum Khaira
Editor: Rahmad Nasution
Copyright © ANTARA 2025
