Jakarta-President Prabowo Subianto‘s governance finalized new regulations Tuesday evening establishing a standardized formula for minimum wage increases across Indonesia, a move impacting tens of millions of workers in the world’s fourth most populous nation. [[1]] the new rules, signed into effect after consultations with labour unions adn economic analysts, aim to provide greater clarity and predictability in annual wage adjustments. Labor minister Yassierli announced the details in a surprise late-night press conference, outlining a formula tied to both inflation and economic growth.
Jakarta, President Prabowo Subianto has enacted new regulations governing minimum wage standards in Indonesia. The new rules, formalized through a government regulation signed on Tuesday, December 16, 2025, aim to establish a clearer and more consistent framework for wage increases across the country.
Labor Minister Yassierli announced the regulation’s signing Tuesday evening, stating it followed extensive study and analysis, incorporating feedback from various stakeholders, particularly labor unions.
“Alhamdulillah, the Wage Regulation has been signed by Mr. President Prabowo Subianto today, Tuesday, December 16, 2025,” Yassierli said.
The formula for wage increases will be based on inflation plus economic growth multiplied by a factor ranging from 0.5 to 0.9, Yassierli explained. “The President has decided on a formula of Inflation + (Economic Growth x Alpha) with an Alpha range of 0.5 – 0.9,” he added.
Regional Wage Councils will now use this formula to calculate minimum wages, submitting recommendations to each province’s governor.
The regulation mandates that governors establish provincial minimum wages (UMP) and district/city minimum wages (UMK), as well as sectoral minimum wages at both the provincial and district/city levels.
“Specifically for 2026, governors must finalize wage increases no later than December 24, 2025,” Yassierli stated.
Unexpected Evening Announcement
The official announcement, released late Tuesday evening, fulfilled a promise made earlier in the day by Labor Minister Yassierli to reveal a “surprise” regarding the 2026 minimum wage increase.
When questioned by reporters about the certainty of a minimum wage increase for 2026 earlier Tuesday, Yassierli simply told them to “wait for the surprise.”
“Tunggu saja surprise,” Yassierli said at the Ministry of Finance in Jakarta, Tuesday, December 16, 2025.
Around 10 p.m. Tuesday, the Ministry of Manpower released an official statement outlining the details of the 2026 minimum wage increase.
“We hope this wage policy, as outlined in the Wage Regulation, will be the best policy for all parties involved,” Yassierli said.
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Foto: Menaker Yassierli (Dok. Kemnaker)
Menaker Yassierli (Dok. Kemnaker)
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(dce/dce)
