Tens of Millions of Employees Earned Below the Minimum Wage in August 2022

According to a report by the Central Statistics Agency (BPS), in August 2022, 46.12% of laborers, employees, or staff received salaries below the provincial minimum wage (UMP).

Laborers/employees/staff are individuals who work for another person or institution/office/company on a permanent basis and receive a salary in the form of money or goods.

"Laborers without a permanent employer are not classified as laborers/employees/staff, but as independent workers. A person is considered to have a permanent employer if they have the same employer for the last month," said BPS in its report, *Keadaan Pekerja di Indonesia* *August 2022*.

The percentage of laborers/employees/staff whose salaries are below the UMP decreased in August 2022, even reaching its lowest point since the beginning of the pandemic, as shown in the graph.

Nevertheless, the number is still very large. According to the BPS report, in August 2022, the total number of laborers/employees/staff in Indonesia reached 50.94 million people. Based on this figure, the number of employees with salaries below the UMP is approximately 23.49 million people.

Employers Who Don't Pay UMP Face Sanctions

The government has threatened sanctions against employers who pay their employees below the UMP.

Based on Article 81, point 63 of the Job Creation Law, which amends Article 185 paragraph (1) of the Manpower Law, employers who pay wages lower than the minimum wage face criminal penalties of imprisonment for a minimum of 1 year and a maximum of 4 years, and/or a fine of at least Rp100 million and a maximum of Rp400 million.

However, based on Article 81, point 28 of the Job Creation Law, which includes the new Article 90B paragraph (1) of the Manpower Law, the minimum wage provision is exempted for micro and small businesses.

In this regard, the government also urges employees to immediately report if they receive salaries less than the minimum wage.

"We hope that reports are submitted directly because we will immediately investigate the reports and we request initial evidence," said the Acting Head of the Supervision Section of the West Jakarta Manpower, Transmigration, and Energy Sub-department, Efan Aptito, as reported by *Antara*, Thursday (1/12/2022).

In 2022, the average UMP across Indonesia reached Rp2.72 million. Then in 2023, the UMP increased by a maximum of 10%, with different increases in each region.