Indonesian firms obligated to create wage structure

Besides serving as a guideline for businesses, the move will also bridge the gap between the lowest and highest earnings.
By: | August 25, 2022

Companies in Indonesia are required to formulate and implement a wage structure to achieve fairness in salaries, said Manpower Minister Ida Fauziyah.

This wage scale structure will serve as a guideline for companies to determine the salaries of workers ranked lowest to highest in a company, she explained, adding that this would also help reduce the gap between the lowest and highest wages. 

“The structure and scale of wages is an obligation that must be formulated and implemented by the company by taking into account capabilities and productivity,” she said, citing the country’s regulations.

The minister believes that such arrangements are necessary to achieve fair wages, promote improvement in productivity, and boost the welfare of workers in Indonesia.

READ: Companies in Indonesia urged to enhance work health and safety

So far, only 55,844 companies have formulated and implemented a wage scale structure in their respective companies.

“This figure is certainly expected to continue to increase in future. Hence, it is important for us to be able to increase the number of entrepreneurs, companies, and the community’s understanding regarding the structure and scale of this wage,” she said, reports Antara.