Severance, minimum wage remain sticking points in labor bill talks

Indonesian trade unions are pushing for labor rules that strike a balance between business viability and worker welfare as the government and Parliament strive to finalize a new labor protection bill. In a recent rally in Central Jakarta, thousands of workers urged the government to tackle their demands, including stronger protections for outsourced and gig workers, enhanced social security, higher minimum wages, and improved severance benefits.

According to the Confederation of All Indonesian Trade Unions (KSBSI), minimum wages should continue to be a baseline for single workers with less than 12 months of service, rather than a universal flat rate. KSBSI President Elly Rosita Silaban highlighted that many employers still pay the basic minimum wage to long-tenured employees who have not seen any wage increases.

She further called for enhanced social protection for workers impacted by layoffs, emphasizing the importance of the Job Loss Guarantee (JKP) as a crucial source of income support.

The union also stressed the necessity of addressing safeguards during corporate restructuring, transitions, and closures, as handling company and labor agreements (PKBs) could leave workers without sufficient compensation despite years of service. Additionally, the Association of All Indonesian Trade Unions (ASPIRASI) has emphasized the need for stronger worker protection during the resolution of troubled financial institutions, advocating for priority in unpaid wages, severance, and other statutory employment benefits in cases of closure or liquidation.