Indonesia aims to finish initial 2027 minimum wage talks by November end
Provincial governors will set the rates after considering wage council recommendations, with existing rules remaining in force.
Indonesia’s Manpower Minister Yassierli is targeting the end of November 2026 to conclude preliminary discussions on provincial minimum wages for 2027, with at least the ministry’s evaluation completed by that point.
Speaking to reporters in Jakarta, Yassierli said the process must follow established procedures. Deliberations would involve the National Wage Council before moving through regional wage councils.
The government is still estimating decent living needs, known as KHL, as one consideration for setting the provincial minimum wage, or UMP. The ministry will also consult the National Tripartite Cooperation Institution and the National Wage Council on the wage formula.
Those talks will address statutory obligations relating to decent living needs and the surveys used in wage-setting. Each province’s governor will determine its 2027 UMP after considering recommendations from the provincial wage council.
Dhatun Kuswandari, the ministry’s director of industrial relations and wage policy, told ANTARA on October 21 that Government Regulation No. 49 of 2025 would remain the basis for setting the 2027 minimum wage.
The regulation sets the specific index, known as alpha, at 0.5 to 0.9 to reflect labour’s contribution to economic growth. Inflation and economic growth remain variables in the formula used to calculate minimum wage adjustments.
