Indonesia to Implement New Provincial Minimum Wage in January 2026

Delayed Announcement Due to New Regulation

The Indonesian government is preparing to announce the 2026 Provincial Minimum Wage (UMP) before the end of December 2025, according to Minister of Manpower Yassierli. The new wage rate will take effect starting January 2026. The announcement has been delayed from its original deadline of November 21 due to the ongoing formulation of a new government regulation (PP) that will serve as the legal foundation for the wage adjustment.

Preparation of New Government Regulation

The new regulation is currently being drafted to provide a legal basis for the minimum wage determination. Yassierli emphasized that the government aims to finalize the announcement before December 31, 2025, to allow for implementation in January 2026. This timeline is crucial for both employers and employees to prepare for the wage adjustments.

Impact on Businesses and Workers

The adjustment of the provincial minimum wage will have significant implications for businesses and workers across Indonesia. Employers will need to adjust their payroll accordingly, while workers are expecting a potential increase in their wages. The government's decision will be closely watched by various stakeholders, including business associations and labor unions.