Big minimum wage rises in Badung, Denpasar

The raises were higher than the usual annual increase of around 10 per cent.

The minimum wage in Badung, the province’s richest regency, will rise to Rp1.72 million (Bt4,600) from the current Rp1.4 million. Meanwhile, in the island’s capital city, it will go up to Rp1.56 million from Rp1.36 million in 2013.

Denpasar Social and Manpower Agency head Erwin Suryadharma Sena said the decision was based on the monthly standard cost of living (KHL) surveys, which the city’s wage council had been conducting since early this year.

The stakeholders include the All-Indonesia Workers Union, the Indonesian Employers Association and the government.

Erwin said that 60 KHL items were included in the survey, an increase from the initial 46 items.

“We surveyed the cost of the 60 items every month in Kreneng and Badung traditional markets and some shopping centers in Denpasar,” he said.

In addition to the KHL, the team also considered economic growth, inflation, unemployment and population growth as the basis to decide the 2014 minimum wage.

Erwin said that this increase was higher than the preceding years. “The 14 per cent increase is higher than the usual rise of around 10 per cent. But this is the actual figure, considering economic growth and the 60 KHL items,” he said.

He, however, added that implementation for tourism workers may differ.

Based on the increase, employers are obliged to pay their workers who have been working for less than one year based on the decision. Employees who have worked more than one year may be entitled to a higher rise.

Erwin stressed that developed companies should give a higher than minimum wage. Meanwhile, companies who felt burdened by the decision were allowed to apply for a dispensation.

“But we call on employers to be transparent. If they can comply with the decision, then they should pay. Those wanting a dispensation must open their accounts to us,” said Erwin.

Erwin went on to say that his team actually proposed a higher increase, but the overall condition of the existing companies did not allow for it.

The agency’s records show that there are 2,500 companies in the city with 75,000 workers. From this figure, 40 per cent are in tourism, such as travel agents.

Separately, Badung Social and Manpower Agency head Luh Putu Suryanti cited the 23 per cent increase in the regency as “the best negotiation result between employers and workers”.

Badung is home to 9,045 business enterprises with 310,150 workers. From this figure, 70 per cent are in the tourism sector.

Agreeing with Sena, Suryanti said tourism employees should be entitled to a different wage scheme.

She cited hotel workers as an example. Suryanti said that employees in low and high class hotels should differ as the workload and standards also differed.

Both agency heads said they had escalated the decision to the provincial administration for follow-up. “Normally, a final decision will come in December. Intensive information dissemination is implemented afterwards,” Sena said.