Labor Unions Reject Wage Rule, Warn of Nationwide Protests

JAKARTA, Investortrust.id — The Confederation of Indonesian Trade Unions rejects the new government regulation on wages on Thursday, Dec 18, 2025 in Jakarta, saying it was set unilaterally without worker involvement and warning the policy could trigger nationwide protests over the 2026 minimum wage.

KSPI President Said Iqbal said the regulation would be used as the basis for setting next year’s minimum wage despite what he described as the absence of genuine dialogue with labor unions.

He said workers were only invited to a brief socialization session at the Wage Council on Nov 3, 2025 and never participated in drafting the substance of the regulation.

"Workers were never invited to discuss or formulate this government regulation," Said said during an online press conference on Wednesday.

Said added that unions had not been informed of the article by article content of the regulation even after it was announced publicly by the government.

He argued that the government’s definition of a decent living needs deviated from official references and opened room for unilateral wage setting.

According to Said, the proper benchmark for decent living needs should refer to Manpower Regulation No. 18 of 2020, which defined 64 components of living costs used in wage calculations. "Until today, workers, including KSPI, have never known the detailed contents of this wage regulation," he said.

KSPI also questioned the data sources used by the government, saying that if statistical data were applied, the official cost of living survey by Statistics Indonesia should have been the reference.

Said criticized the involvement of the National Economic Council, arguing that the body was not recognized within the tripartite wage setting framework involving government, employers, and workers.

He said the new wage regulation appeared to revive provisions from earlier rules that had been revoked, which labor groups viewed as reintroducing a low wage regime. "If the 2026 minimum wage increase uses this new wage regulation, we reject it," Said said.

KSPI said it accepted the minimum wage formula mandated by the Constitutional Court ruling that combined inflation, economic growth, and a specific index.

However, the union insisted the index should be set at 0.9, the upper limit of the range of 0.5 to 0.9 announced by the government. "We can accept 0.5 to 0.9, but only with a serious commitment," Said said.

KSPI instructed its members to fight for the 0.9 index at regional wage councils and urged local leaders to forward the recommendation unchanged to governors. The union warned that some governors were suspected of deciding on lower figures even before negotiations concluded.

KSPI said it would stage a national protest after regional actions if wage decisions announced on Dec 24, 2025 deviated from the 0.9 index demand. The government rejected accusations of unilateral policymaking and said the regulation was designed to balance worker welfare and industrial sustainability.

Manpower Minister Yassierli said the new wage formula expanded the labor contribution index to give regions flexibility in setting minimum wages based on local economic conditions. "The index was decided by the President at 0.5 to 0.9," Yassierli said at the Ministry of Manpower on Wednesday.

He said the expanded range allowed regions to address wage disparities while considering economic growth and living needs.

Yassierli encouraged dialogue between governments, employers, and workers at the regional level to determine wage increases. He said the new regulation followed the Constitutional Court ruling and strengthened the role of regional wage councils in recommending minimum wages.

President Prabowo Subianto signed the wage regulation on Tuesday, Dec 16, 2025, making it the legal basis for determining the 2026 provincial minimum wage. The government said governors must announce minimum wage increases no later than Dec 24, 2025.