Government Forms A Team To Handle Companies Having Difficulty In Paying Minimum Wage

Government Forms A Team To Handle Companies Having Difficulty In Paying Minimum Wage

Thursday, 05 Dec 2024

The Minister of Manpower, Yassierli, announced that his office, in collaboration with relevant ministries, is in the process of forming a team to address potential challenges faced by companies regarding the payment of the minimum wage for 2025. This initiative is prompted by the financial difficulties some companies are currently experiencing. The increase in the minimum wage by 6.5 percent may impose additional burdens on these businesses.

"The 6.5 percent increase in the minimum wage is uniform, and we recently met with the Indonesian Employers Association (Apindo). I want to reiterate that we fully understand that some companies may be facing financial hardships," Yassierli stated during a press conference at the Ministry of Manpower's office in Jakarta on Wednesday, December 4, 2024.

"We are in the process of establishing a joint team, supported by the Minister of Economy, to determine specific treatments for industries that may encounter difficulties in implementing this change," he added. Yassierli emphasized that there is still time to intervene with companies, as the regulations regarding the minimum wage for 2025 will take effect on January 1, 2025. In addition to forming the team, the government plans to implement a comprehensive approach to address the issue.

However, the handling plan still requires further refinement by the Ministry of Manpower in conjunction with the relevant ministries. "We need to finalize the intervention strategies," he asserted.

Minister Yassierli elaborated on the process that led to the 6.5 percent increase in the minimum wage. He indicated that this decision was the result of an extensive economic study and discussions with both business associations and labor representatives.

Furthermore, from the outset, the government recognized the challenges associated with raising the minimum wage, particularly regarding its impact on various industries. "Our challenge lies in identifying specific industries that may be adversely affected by the increase in the minimum wage, which is a concern for them and a key aspect of our approach. We understand that a uniform increase may pose difficulties for some sectors," Yassierli stated.

He added, "We still have time to assess which industries require special consideration, and this process involves collaboration across ministries as well as agencies related to labor. We are currently coordinating with the Coordinating Minister for Economic Affairs." On Wednesday, Minister Yassierli officially issued Regulation No. 16 of 2024 concerning the Establishment of the Minimum Wage for 2025.

According to the Minister, the minimum wage regulations for 2025 will take effect on January 1, 2025. (deriz@insightinnews.com)

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