BEWARE! THERE IS CRIMINAL SANCTION FOR PAYING WAGES BELOW MINIMUM STANDARD!
Every year, the provinces or regencies/cities in Indonesia experience an increase in minimum wage, as in Jakarta Province has reached Provincial Minimum Wage (UMP) of Rp. 3.355.750,00 per month in 2017. This increased UMP cannot be separated from the employers’ objections. Due to the few customers and low finansial conditions, the company has higher costs and fees.
Nevertheless, this condition cannot be ruled out by the company or the businessman. Basically, the employers are prohibited to pay wages lower than the minimum wage standard. Minimum wage for employee consists of:
- Minimum wage by province or regency/city;
- Minimum wage by sectors in province or regency/city.”
Article 185 paragraph (1) Law No. 13 of 2003 on Manpower (Law No. 13/2003) regulates:
Employers who pay wages below the minimum wage standard shall be subjected to a criminal sanction in jail for a minimum of 1 (one) year and a maximum of 4 (four) years and/or a fine of a minimum of Rp. 100.000.000,00 (one hundred million rupiah) and a maximum of Rp. 400.000.000,00 (four hundred million rupiah).
In addition, it is important for company and employers to know that Article 185 paragraph (1) Law No. 13/2003 is categorized as a criminal act and non-claimant offense. It means that this crime can be handled by the authority such as Police or Labor Inspector without having to wait for complaints filed by employees as the victims.
Postponing UMP Payments
Employers may request to postpone paying minimum wage to avoid criminal sanction. This is in accordance with provision under Article 90 paragraph (2) Law No. 13/2003 which states that if the employers are unable to pay minimum wage, the employers may postpone paying minimum wages.
The procedures in postponing minimum wages payment are regulated in Minister of Manpower and Transmigration Decree No. Kep-231/Men/2003 on Procedures of Postponing Minimum Wages Payment.
Article 3 paragraph (1) and (2) of Minister of Manpower and Transmigration Decree No. Kep-231/Men/2003 states:
Postponing minimum wages payment shall be requested by employers to the Governor through the institution responsible in provincial manpower sector no later than 10 (ten) days before effective date of minimum wages and has obtained written agreement between employers and employees or registered workers union.
This written agreement is done with an honest, profound, and open discussion between employers and employees or workers union (Article 3 paragraph (8) of Minister of Manpower and Transmigration Decree No. Kep-231/Men/2003). Hence, after the postponing license has ben issued, the employer or company can temporarily avoid the criminal sanctions.
It is important to know that the postponing license is valid for maximum time of 12 (twelve) months. After that, the employers are obliged to pay the minimum wage.
We hope this article is useful.
BP Lawyers can assist you
BP Lawyers can assist you in providing best solution for disputes and cases related to wage criminal offense through assistance in the Police and dispute settlement of criminal case in Public Court. You can contact us via:
Dalmy Nasution, S.H. / Ali Imron, S.H.I