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May

10

Minister of Manpower Regulation No.5 of 2023: Companies Can Adjust Labor Wages

Recently, the Ministry of Manpower issued a regulation in Indonesia intended to maintain the sustainability of the industrial climate in Indonesia amidst global economic uncertainty. This is the Minister of Manpower Regulation No. 5 of 2023 concerning Adjustment of Working Time and Wages in labor-intensive export-oriented industrial Companies that Affected by Changes in the Global Economy ("MOMR 5/2023").

According to Article 2 of MOMR 5/2023, this regulation is created to provide protection and maintain the employment of workers, as well as to sustain the operations of certain labor-intensive export-oriented industrial companies from the impact of global economic changes that result in a decline in market demand. Article 3 of MOMR 5/2023 defines labor-intensive export-oriented industrial companies as companies that have at least 200 workers, where labor costs account for at least 15% of production costs, and production is dependent on orders from the United States and countries in Europe, as evidenced by order request letters. These companies include, but are not limited to, the textile and garment industry, footwear industry, leather and leather goods industry, furniture industry, and children's toy industry.

To achieve this goal, MOMR 5/2023 grants the authority to business actors to adjust the wages of their workers accordingly. Article 5 of MOMR 5/2023 explains that labor-intensive export-oriented industrial companies affected by global economic changes may adjust their working hours. This adjustment is made by reducing the regular working hours in the company. In detail, the adjustment of working hours can be less than 7 (seven) hours per day and 40 (forty) hours per week for 6 (six) working days in 1 (one) week, or less than 8 (eight) hours per day and 40 (forty) hours per week for 5 (five) working days in 1 (one) week.

Furthermore, labor-intensive export-oriented industrial companies affected by global economic changes may adjust the wage of their workers. This is done with the provision that the wage paid to the workers is at least 75% (seventy-five percent) of their usual wage.

It is important to note that companies cannot unilaterally establish this policy without the approval of their workers. As stated in MOMR 5/2023, whether it is an adjustment of working hours or wages, employers must first reach an agreement with their workers. Article 9 of MOMR 5/2023 explains that such an agreement must be made in writing and must at least include: adjustment of working hours, wage rate, and the duration of the agreement. Moreover, the agreement is prohibited from having a duration exceeding the predetermined time, which is a maximum of 6 (six) months from the date MOMR 5/2023 is established. Additionally, employers must convey the agreement to their workers or labor unions and to the local district/city Manpower Office, which will be copied to the provincial Manpower Office and the Ministry of Manpower.

If you need consultation concerning labor issues, Schinder Law Firm is one of many corporate law firms in Indonesia. Our professional civil lawyers strive to understand your unique needs and concerns; we will develop creative, cost-effective ways to assist you. Contact us at info@schinderlawfirm.com today to schedule a consultation to discuss your situation and how we can help.

Author: Dewi Susanti

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Dear valued Visitor,

Data is a valuable currency in this new world. In the midst of digital transformation, the Indonesian government has taken the final decision to pass the Pelindungan Data Pribadi (PDP) Bill by September 2022. The PDP Law applies to all businesses established in Indonesia and puts the consumer in control. The task of complying with this regulation falls upon businesses.

The PDP Law affects a variety of business operations, including how your sales team prospect and how marketing initiatives are managed. Businesses have had to reassess their business procedures, applications, and forms. Additionally, all businesses that work with personal data should designate a Data Protection Officer (DPO) or data controller to oversee PDP compliance.

In line with this spirit, it gives us great pleasure to announce and share with all our esteemed clients and business associates that Schinder Law Firm is prepared to assist your company to understand the impacts of the Personal Data Protection Law (PDPL) and take the required measures to comply with the law. Our Privacy, Data Protection, and Cybersecurity practice group is a pioneer in providing data privacy law services in Indonesia. Personal data protection services include but are not limited to:

  • Assessing the existing systems, processes, and controls, etc.
  • Providing provide gap assessment on the existing systems, processes, and controls, etc.
  • Developing and ensuring contracts and agreements comply with the PDP Law
  • Developing policies, best practices, and procedures
  • Advising on the security of personal data and managing data breaches
  • Acting as the Data Protection Officer (DPO) and advising upon the appointment, role, and responsibilities of a data protection officer
  • Advising on cross-border transfers of personal data
  • Carrying out data protection impact assessments and data protection audits
  • Recommending other necessary corrective actions in order to comply with the PDP Law
  • Training on the PDP Law tailored to clients’ businesses

We look forward to many more opportunities in the year ahead with your continued support and trust. For consultation, please send us a WhatsApp or Email.

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Naz Schinder
Managing Partner

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Keep Up with the New Law in Indonesia: Personal Data Protection

  • Assessing the existing systems, processes and controls, etc.
  • Providing provide gap assessment on the existing systems, processes and controls, etc.
  • Developing and ensuring contracts and agreements comply with the PDPL.
  • Developing policies, best practices and procedures.
  • Advising on security of personal data and managing data breaches.
  • Acting as the Data Protection Officer (DPO) and advising upon the appointment, role and responsibilities of a data protection officer.
  • Advising on cross-border transfers of personal data.
  • Carrying out data protection impact assessments and data protection audits.
  • Recommending other necessary corrective actions in order to comply with the PDPL.
  • Training on the PDPL tailored to clients’ businesses.
Privacy, Data Protection and Cyber Security
We help our clients to understand the impact of the Personal Data Protection Law (PDPL) on their companies and take the required measures to comply with the law.
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