Indonesian Labor Unions Reject 2026 Minimum Wage Increase, Plan Legal Action and Protests

Unions Demand Better Wage Adjustment

The Konfederasi Serikat Pekerja Indonesia (KSPI) has strongly rejected the recently announced 2026 Provincial Minimum Wage (UMP) increase, arguing that the adjustment is insufficient to address the rising cost of living. In response, the union is planning to take two major actions: filing lawsuits with the Administrative Court against the UMP decisions in several provinces, including DKI Jakarta and Jawa Barat, and organizing mass protests at the Presidential Palace in Jakarta on December 29-30, 2025 ¹

Government Formula for Minimum Wage Calculation

The 2026 UMP increase, ranging between 6-7%, was determined based on Government Regulation No. 49/2025, which considers national economic conditions, inflation, and decent living standards. The formula used is: Inflation + (Economic Growth x Alpha), where Alpha is a variable representing labor's contribution to economic growth, ranging from 0.5 to 0.9 as set by the Ministry of Manpower ²

Implications of the Labor Unions' Actions

The planned lawsuits and protests highlight the ongoing tension between labor unions and the government regarding wage policies. The unions' actions could potentially influence future wage decisions and labor policies in Indonesia.