Extent of Protection
In principle, every worker has the right to receive fair and equal treatment without discrimination from the employer. In other words, employers are obliged to grant rights (such as wages, benefits, and others) and determine work obligations equally, without distinction based on gender, ethnicity, race, religion, skin colour, or political views (Article 6 of the Manpower Law). Furthermore, every worker has the right to a decent livelihood, equal treatment in wage systems without discrimination, and equal pay for work of equal value (Article 2 of GR 36/2021). Therefore, employers are prohibited from setting different wage levels between employees based on factors such as gender, origin, religion, race, skin colour, or political opinion.
The principles of wage equality and non-discrimination under the Manpower Law and its implementing regulations are rooted in Indonesia’s ratification of ILO Convention No. 100 of 1951 on Equal Remuneration for Men and Women Workers for Work of Equal Value (“ILO Conv. 100”) through Law No. 80 of 1957 on Ratification of ILO Conv. 100 (“Law 80/1957”). As stipulated in Article 1 of ILO Conv. 100, the term “remuneration” covers ordinary, basic, or minimum wages or salaries, and all other additional income paid directly or indirectly, in cash or in kind, by the employer to the worker as compensation for work performed. Such remuneration must be provided equally to male and female workers for work of equal value, without discrimination. If there are differences in wage levels between employees, such differences must be based on objective factors, such as the results of objective job evaluations of the work to be performed (Article 3 paragraph 3 of ILO Conv. 100).
The principle of wage equality not only emphasizes fair treatment between male and female workers but also requires employers to pay wages in accordance with the applicable minimum wage, either UMP or UMK as described in Section IV Number 2. Working Conditions – Salary, to ensure a decent standard of living for every worker. This is consistent with Article 88E paragraph (2) of the Manpower Law, which stipulates that employers are prohibited from paying employees’ wages below the applicable minimum wage.
Remedies
The remedies available to workers who experience wage discrimination by their employers are as follows:
a. Administrative Sanctions: The central or regional government may impose administrative sanctions on employers who engage in wage discrimination among their employees. The administrative sanction in the form of warnings up to the business license revocation. (Article 6 and Article 190 paragraph 1 of the Manpower Law)
b. Industrial Relations Dispute Proceedings: As regulated under Article 2 (a) and Article 1 paragraph 2 of IRC Law, one type of industrial relations dispute (Perselisihan Hubungan Industrial or “PHI”) is a right dispute, i.e., a dispute arising from the non-fulfilment of rights, which include salary matters. Therefore, if a worker believes that the wage they receive is discriminatory, the worker may pursue the PHI dispute resolution mechanism as provided under IRC Law.
c. Criminal Sanctions: As previously outlined, one of the fundamental rights of workers is to receive fair remuneration, where wage determination among employees must not be discriminatory. In other words, employers are obliged to pay wages in accordance with the agreed terms, without any discriminatory treatment among workers, and such wages must not be lower than the applicable minimum wage (UMP or UMK) (Article 88A paragraph 3 and Article 88E paragraph 1 of Manpower Law). Should an employer fail to pay wages as agreed and/or pay wages below the minimum wage, each of such violations may subject the employer to criminal sanctions of imprisonment for 1 up to 4 years, and/or a fine ranging from IDR 100 to 400 million (Article 185 paragraph (1) of the Manpower Law).
Enforcement/Litigation
Please bear in mind that employers are prohibited from paying wages below the UMP/UMK, as such actions are subject to criminal sanctions. An example of the enforcement of these criminal sanctions can be seen in Supreme Court Decision No. 678 K/Pid.Sus/2013, where Sugiono, a Director of PT Inti Buana Nusantara, was found guilty of paying employee wages below the Pontianak City UMK for 2009 and failing to register 17 of his employees in the Workers’ Social Security Program. The Supreme Court ruled that such conduct violated Article 90 paragraph (1) in conjunction with Article 185 paragraph (1) of Manpower Law, and Article 4 paragraph (1) in conjunction with Article 29 paragraph (1) of Jamsostek Law. The employer was sentenced to 1 year imprisonment with a probation period of 1 year and 6 months, and was required to pay the wage shortfall and register his employees in the social security program.
Other Requirements
The employers are implicitly required to disclose their salaries to their employees to the regulator. It could be evidenced by the requirements to submit PKWT to MoM once it has been signed by the parties. Moreover, the CR and CLA need to be approved by MoM during the preparation to ensure that any terms and conditions, including salary calculation, comply with the regulation.
