Local governments in Indonesia have announced an increase in the 2024 Provincial Minimum Wage (UMP). The rules for the 2024 UMP increase are contained in Government Regulation (PP) No. 51 of 2023 concerning Amendments to Government Regulation No. 36 of 2021 concerning Wages. In this regulation, the formula for increasing the minimum wage includes three variables, namely inflation, economic growth, and certain indices. Article 26 paragraph (4) of the PP contains a formula for calculating next year’s minimum wage, namely the current year’s minimum wage plus the adjustment value of next year’s minimum wage. This provision shows that the government considers various economic factors in determining the UMP increase. This policy is designed to provide the right balance between workers’ needs and overall economic conditions. Moreover, to ensure business sustainability and regulatory compliance, companies across Indonesia are required to understand and follow each region’s UMP. That way, companies can more effectively plan budgets, manage human resources, and maintain good labor relations. So, what is the 2024 UMP for each region? And if the company pays workers below the UMP provisions, what are the sanctions? Check out further discussion in the following article.
UMP at a glance
UMP or Provincial Minimum Wage is the lowest wage applicable in a province. UMP is the minimum standard used by employers or industry players to provide wages to workers in their business environment. The UMP calculation is based on the minimum living needs of workers per month in an area, considering that the fulfillment of needs that are categorized as decent in each province is different. This means that the minimum wage or salary for workers in one province can be different from the minimum wage for workers in other provinces.
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UMP in Indonesia is set by the provincial government/governor based on the recommendation of the Provincial Wage Board. UMP is announced no later than November 21 of the current year and takes effect from January 1 of the following year. In addition, the amount of UMP usually changes every year.
List of UMP 2024
The following is a list of UMP 2024 in all provinces in Indonesia along with the increase:
- Aceh (up 1.38 percent) From Rp3,413,666 to Rp3,460,672
- North Sumatra (up 3.67 percent) From IDR 2,710,493 to IDR 2,809,915
- West Sumatra (up 2.74 percent) From IDR 2,742,476 to IDR 2,811,449
- Riau Islands (up 3.76 percent from IDR 3,279,194 to IDR 3,402,492)
- Bangka Belitung (4.04 percent increase) From Rp3,498,479 to Rp3,640,000
- Riau (up 3.2 percent) From Rp3,191,662 to Rp3,294,625
- Bengkulu (up 3.38 percent) From IDR 2,418,280 to IDR 2,507,079
- South Sumatra (up 1.55 percent) From Rp3,404,177 to Rp3,456,874
- Jambi (up 3.2 percent) From IDR 2,943,000 to IDR 3,037,121
- Lampung (up 3.16 percent) From IDR 2,633,284 to IDR 2,716,497
- Banten (up 2.5 percent) From IDR 2,661,280 to IDR 2,727,812
- DKI Jakarta (up 3.8 percent) From Rp4,900,798 to Rp5,067,381
- West Java (up 3.57 percent) From IDR 1,986,670 to IDR 2,057,495
- Central Java (up 4.02 percent) From IDR 1,958,169 to IDR 2,036,947
- Special Region of Yogyakarta (7.27 percent increase) From IDR 1,981,782 to IDR 2,125,897
- East Java (up 6.13 percent) From IDR 2,040,244 to IDR 2,165,244
- Bali (up 3.68 percent) From IDR 2,713,672 to IDR 2,813,672
- West Nusa Tenggara (up 3.06 percent) From IDR 2,371,407 to IDR 2,444,067
- East Nusa Tenggara (up 2.96 percent) From IDR 2,123,994 to IDR 2,186,826
- West Kalimantan (up 3.6 percent) From IDR 2,608,601 to IDR 2,702,616
- Central Kalimantan (up 2.53 percent) From IDR 3,181,013 to IDR 3,261,616
- South Kalimantan (up 4.22 percent) From Rp3,149,977 to Rp3,282,812
- East Kalimantan (up 4.98 percent) From Rp3,201,396 to Rp3,360,858
- North Kalimantan (up 3.38 percent) From IDR 3,251,702 to IDR 3,361,653
- Central Sulawesi (up 5.28 percent) From IDR 2,599,546 to IDR 2,736,698
- Southeast Sulawesi (up 4.6 percent) From IDR 2,758,984 to IDR 2,885,964
- North Sulawesi (up 1.67 percent) From IDR 3,485,000 to IDR 3,545,000
- South Sulawesi (up 1.45 percent) From Rp3,385,145 to Rp3,434,298
- Gorontalo (1.19 percent increase) From IDR 2,989,350 to IDR 3,025,100
- West Sulawesi (up 1.5 percent) From IDR2,871,794 to IDR2,914,958
- Maluku (up 4.88 percent) From IDR 2,812,827 to IDR 2,949,953
- North Maluku (7.5 percent increase) From IDR 2,976,720 to IDR 3,200,000
- Papua (up 4.14 percent) From IDR 3,864,696 to IDR 4,024,270
- West Papua (up 3.38 percent) From Rp3,282,000 to Rp3,393,000
- Central Papua (4.13 percent) From Rp3,864,700 to Rp4,024,270
- Papua Mountains (up 4.14 percent) From IDR 3,864,696 to IDR 4,024,270
- Southwest Papua (up 4.14 percent) From IDR 3,864,696 to IDR 4,024,270
- South Papua (up 4.14 percent) From IDR 3,864,696 to IDR 4,024,270
Companies Must Adjust UMP 2024 for Workers!
Article 81 number 24 of the Job Creation Law explains that the government regulates policies regarding the minimum wage limit or UMP in order to realize workers’ rights to a decent livelihood for humanity. Thus, according to Article 81 number 25 of the Job Creation Law, companies or employers are prohibited from paying wages lower than the minimum wage. To find out whether the wages received by workers violate the UMP provisions or not, what companies need to know is which wage components can be used as minimum wage components. Where based on Article 23 paragraph (1) of the Wage Regulation, the minimum wage is the lowest monthly wage consisting of:
- Wages without benefits; or
- Basic wage and fixed benefits.
For example, an employee by the name of Andi works in DKI Jakarta with a UMP 2024 of IDR 5,067,381, while the basic wage received is only IDR 4,000,000 without any fixed allowances. So it can be concluded that the company has violated the minimum wage provisions. Where the attendance fee received by employees cannot be calculated because it is a non-permanent allowance that is not included in the minimum wage component. However, regarding wages, there are exceptions for micro and small businesses from the minimum wage requirements, at least they must consider the following factors:
- Rely on traditional resources;
- Not engaged in high-tech and non-capital-intensive businesses.
Where in micro and small businesses, wages can be determined based on an agreement between employers and workers with provisions:
- At least 50 percent of the average consumption of people in the Province;
- At least 25 percent above the provincial poverty line.
Both parameters are determined based on data sourced from authorized institutions in the field of statistics.
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Employers who violate the minimum wage provisions will be subject to a minimum of one year in prison or a maximum of four years in prison, and/or a minimum fine of IDR 100 million and a maximum of IDR 400 million. This is in accordance with the provisions of Article 81 number 63 of the Job Creation Law.
KH Contact
This is the explanation about UMP 2024 and its provisions. So, if your KH Friend runs a business or company, it is mandatory to pay a minimum salary in accordance with the UMP that has been regulated by each province, yes! Also, make sure that the provisions and policies regarding employee wages are outlined in the employment contract letter so that it can protect the company and employees from the risk of disputes in the future. For that, you can utilize Kontrak Hukum in making all types of business contracts, including employee employment agreements both PKWT and PKWTT. No need to hesitate because the services at Kontrak Hukum are lawyer approved and can be completed in just 48 hours, 100 percent online without face-to-face so it is guaranteed safe, easy, and certainly affordable. Let’s run a safe working relationship by visiting the KH Services – Employment Contract page. If you have questions about other business needs, feel free to consult for free at Tanya KH or send a direct message (DM) to Instagram @Kontrakhukum.
