COMPARISON BETWEEN LABOR LAW AGAINST OMNIBUS LAW

ABOUT THE CONCEPT OF WAGES IN INDONESIA

Denny, 1951102
Faculty of Law Universitas International Batam
Study Program of Science Law
Gajah Mada Road , Baloi Sei Ladi, Batam City, Kepulauan Riau, 29442

Abstract
The shifting from Indonesian Law Number 13 the Year 2003 about Labor Law to
Indonesian Law Number 11 the Year 2020 about Job Creation or commonly known
as Omnibus Law has sparked many controversies. Because of some significant
changes in the law itself. Some of which are the changes in Concept of Wages,
Overtime, Exemption of Minimum Wages, and the Structure & Scale of the Wages
itself. Some of the regulations considered have tort the laborer in the long run. On the
other hand, the regulations in Indonesian Law Number 11 the Year 2020 about Job
Creation has high potential in attracting investors to start their business in Indonesia
thus creating more jobs for the citizen and reducing the unemployment rate in
Indonesia. The government has enforced these regulations in the hopes of boosting
the country’s economy.

Keywords : Labor Law, Job Creation, Wages

Chapter 1
Introduction
1.1 Background
During the last 5 years, the growth of Indonesia’s Economy is gradually dropping,
in order to overcome the problem on 5th of October 2020, the Indonesian
Government has ratified Indonesian Law Number 11 the Year 2020 about Job
Creation or commonly known as Omnibus Law. Omnibus Law is a concept of
law that revised/revoked other law regulations. Omnibus law offers a solution
caused by over-lapping and over-regulation with the method of revoking/revising
other regulations that are deemed to hinder Indonesia’s Economy and
Development. 1Other than that, the main purpose of Omnibus Law is to facilitate
new business and attract investors to invest in Indonesia thus boosting the
employment for the Indonesia’s citizens. 2
Ever since the ratification of Indonesian Law Number 11 the Year 2020 or
Omnibus Law has sparked many controversies. On one hand, Employers have
been given convenience in applying a System with a relatively low wage thus
giving them the convenience in recruiting and discharging laborer. Other than
that, Employer could easily invest and starting new businesses in Indonesia thus
increasing the economic growth and offering new employment positions.
On the other hand, Omnibus Law is deemed to negatively impact Indonesia’s
Laborer. Other than, the regulations have been made without involving the public,
the substance in Omnibus Law is deemed to negatively affect the laborer because
some regulations regarding laborer protection have been weakened/removed.
Some of the examples includes the removal of the time period of Laborer
Contract for Specific Time , the right for long work breaks, and removal of the
phrase “Decent life necessities” as a reference in calculating minimum wage
1
Firman Freaddy Busroh, “Konseptualisasi Omnibus Law dalam Menyelesaikan Permasalahan
Regulasi Pertanahan”, ARENA HUKUM Volume 10, Nomor 2, Agustus 2017, hal. 241.
2
Alnich Nahtan, “Omnibus Law dan Fleksibilisasi Pasar Tenaga Kerja di Indonesia: Perspektif Makro-
ekonomi dan Ketenagakerjaan”, Volume 1 Nomor 9 Tahun 2020 , hal 5
 which caused the shifting about the concept of wage in general. Socially and
empirically, these regulations have negatively impacted the laborer because of the
imbalanced rights between laborer and employer. Which makes the laborer
doesn’t have enough bargaining position in negotiation. The low wages for
laborers could negatively impact their welfare economically. Because of that, the
writer has decided to research about the concept of wages in Indonesian Law
Number 11 the Year 2020 about Job Creation or Omnibus Law .3
1.2 Problem Discussion
According to the background above, we can conclude the problem which will be
discussed are :
1. What is the definition of wages ?
2. How is the wages system in Indonesian Law Number 13 the Year 2003 about
Labors Law ?
3. How is the wages system in Indonesian Law Number 11 the Year 2020 about
Job Creation ?
4. What is the difference between wages system in Indonesian Law Number 13
the Year 2003 about Labor Law and Indonesian Law Number 11 the Year
2020 about Job Creation ?
1.3 Purpose
According to the problem discussion above, we can conclude the purpose of this
writing are to :
1. Understand the definition about Wages.
2. Understand the wages system in Indonesia’s Constitution No 13 the Year
2003 about Labors Law.
3. Understand the wages system in Indonesia’s Constitution No 11 the Year
2020 about Job Creation

3
Prof. Dr. Sigit Riyanto, S.H., LL.M,”Kertas Kebijakan Catatan Kritis Terhadap UU No 11 Tahun
2020 Tentang Cipta Kerja”, Edisi 2 November 2020 ,hal 7
 4. Differentiate the wages system in Indonesia’s Constitution No 13 the Year
2003 about Labors Law and Indonesia’s Constitution No 11 the Year 2020
about Job Creation .
1.4 Research Mehtod
The research method used is Juridical Normative Research Method. Philipus
M.Hadjon stated that the Juridical Normative research is a method used to search
and defined a law argumentation through analysis on the main problem .By using
Juridical Normative approach , the law is drafted by what is written in the book or
law that is drafted as rules/norms that become the foundation of how people
should behave.. Juridical Normative research can be used to explain, strengthen,
test, or dismissed a theory from research. Judging from its application, this
research method focuses on the problem which is researched based on theory or
the relationship between theory and connection between theory and practice.4

Chapter 2
Discussion
2.1 Definition of Wages

4
Philipus M. Hadjon, Pengkajian Ilmu Hukum Dogmatik (Normatif), dalam “Yuridika”, Jurnal
Hukum Universitas Airlangga Surabaya, No. 6 Tahun IX, November – Desember 1994, hlm. 1.
 Article 1 Paragraph (30) of Indonesia’s Constitution No 13 the Year 2003 about
Labors Law stated that Wage are the rights for workers or laborers to received
compensation in the form of money from the entrepreneur or employer to the
worker or laborer which is determined and paid according to employment
contract, agreement, or Indonesia’s constitution, including allowances for the
workers or laborers and their family for the job and services that have been or will
be performed.5
Republic Indonesia Government Regulation No 78 the Year 2015 about Wage
stated that Wage are the rights of workers or laborers to received compenstation
in the form of money from entrepreneur or employer to the worker or laborer
which is determined and paid according to employment contract, agreement, or
Indonesia’s constitution, including allowances for the workers or laborers and
their family for the job and services that have been or will be performed.6
According to Sadono Sukirno, Wages are payments to unskilled workers whose
jobs are always moving, such as agricultural workers, carpenters, masons and
manual laborers.7
According to Afzalur Rahman, Wages are the price of labor paid for services in
production.8
According to Hendri Anto, Wages are compensation for services provided by a
worker. Deprivation of wages is a bad act that will be threatened by Allah's
punishment.9
According to Endang Dyah Widyastuti and Waridin, concludes that the definition
of wage is an award or remuneration given to employees for their work or
services to entrepreneurs within a certain period of time. Wages are payments for

5
Pasal 1 ayat 30 UU No. 13 Tahun 2003 tentang Ketenagakerjaan
6
Peraturan Pemerintah Republik Indonesia Nomor 78 Tahun 2015 tentang Pengupahan
7
Sadono Sukirno, Pengantar Mikro Ekonomi, Edisi Ketiga, PT Raja Grafindo Persada, Jakarta, 1994,
Hlm.354
8
Afzalur Rahman, Dokrin Ekonomi Islam Jilid 2, PT. Dhana Bhakti Wakaf, Yogyakarta, 1995, hlm.
361
9
Hendrie Anto, Pengantar Ekonomika Mikro Islam, Ekonosia, Yogyakarta, 2003, Hlm. 227
 short-term work. Wages are paid for workers who are involved in the production
process either directly or indirectly.10
From the various meanings of wages above, it can be concluded that Wages are a
form of payment to workers for services that have been provided, the employer is
then have to pay the wage according to the job agreement that has been agreed by
both parties.
2.2 Wages in Indonesian Law Number 13 the Year 2003
Article 1 Paragraph (30) of Indonesia’s Constitution No 13 the Year 2003 about
Labors Law stated that Wage are the rights for workers or laborers to received
compensation in the form of money from the entrepreneur or employer to the
worker or laborer which is determined and paid according to employment
contract, agreement, or Indonesia’s constitution, including allowances for the
workers or laborers and their family for the job and services that have been or will
be performed.11
2.2.1 The Principle of Wage
2.2.1.1 Principles of Decent Livelihood
Article 88 Paragraph (1) of Indonesia’s Constitution No 13 the
Year 2003 about Labors Law, explains that:
"Every worker / laborer has the right to earn a decent income to
live a decent life for humanity."12
The definition of decent life is to be able to support a normal life,
including, among things such as, clothing, food, shelter, education,
health, recreation, and pension plan .
2.2.1.2 Principle of Minimum Wage for Laborers

10
Endang Dyah Widyastuti Dan Waridin,” Pengaruh Imbalan, Kondisi Fisik Lingkungan Dan
Hubungan Antar Karyawan Terhadap Prestasi Kerja Tenaga Medis,” Ekobis, Vol. 17, No. 2, April,
2002, Hlm. 121
11
Pasal 1 ayat 30 UU No. 13 Tahun 2003 tentang Ketenagakerjaan
12
Pasal 88 Ayat (1) Undang-Undang No. 13 Tahun 2003 tentang Ketenagakerjaan
 Article 88 Paragraph (4) of Indonesia’s Constitution No 13 the
Year 2003 about Labors Law, explains that:
"The government sets the minimum wage as referred to in
paragraph (3) letter a based on the needs of a decent life and with
due observance of productivity and economic growth."13
The Application of Regional Minimum Wage
Article 89 Paragraph (1) of Indonesia’s Constitution No 13 the
Year 2003 about Labors Law ,explains that :
"Minimum wage referred in Article 88 Paragraph (3) consist of:
a. Minimum wage on province or region/city;
b. Minimum wage according to province or region/city sectors. "14
This article explains that the Minimum Wage is divided into
Provinces and Regions/Cities. Where the Region/City Minimum
Wage can’t be lower than Province Minimum Wage and the
Minimum Wage between each Region/City varies according to the
standard of living & economic development of the Region/City
itself.
Example:
TanjungPinang City Minimum Wage : Rp. 3,013,012
Batam City Minimum Wage : Rp. 4,150,930.
Bintan District Minimum Wage : Rp. 3,648,714.

Regarding the Regulation of Minimum Wage Standards

Article 91 Paragraph (1) of Indonesia’s Constitution No 13 the
Year 2003 about Labors Law, explains that:

13
Pasal 88 Ayat (4) Undang-Undang No.13 Tahun 2003 tentang Ketenagakerjaan
14
Pasal 89 Ayat (1) Undang-Undang No.13 Tahun 2003 tentang Ketenagakerjaan
 "Entrepreneurs are prohibited from paying wages lower than the
minimum wages as referred to in Article 89."15
This article states that the wage given by an entrepreneur /
employer should not be lower than the minimum wage that have
been determined by the government in according to prevailing
laws and regulations.
Regarding Violation of Minimum Wage Regulations
Article 91 Paragraph (2) of Indonesia’s Constitution No 13 the
Year 2003 about Labors Law, explains that:
"In the event that the agreement as referred to in paragraph (1) is
lower or contradicts the statutory regulations, the agreement is null
and void, and the entrepreneur is obliged to pay the worker /
laborer wage according to the prevailing laws and regulations."16
Article 185 of Indonesia’s Constitution No 13 the Year 2003 about
Labors Law, explains that :
"Anyone who violates the provisions referred to in ... Article 90
paragraph (1) ... shall be subject to imprisonment for a minimum
of 1 (one) year and a maximum of 4 (four) years and / or a fine of
at least Rp 100,000,000.00 (one hundred million rupiah) and a
maximum of Rp. 400,000,000.00 (four hundred million rupiah). "17
This article explains that for an entrepreneur / employer who
violates the provisions of the minimum wage, the agreement is null
and void and the entrepreneur / employer may be subject to
imprisonment and fines based on proceedings Law regulations.
2.2.2 Wage System
The wage system is divided into several category, namely:

15
Pasal 91 Ayat (1) Undang-Undang No.13 Tahun 2003 tentang Ketenagakerjaan
16
Pasal 91 Ayat (2) Undang-Undang No.13 Tahun 2003 tentang Ketenagakerjaan
17
Pasal 185 Undang-Undang No.13 Tahun 2003 tentang Ketenagakerjaan
 2.2.2.1 Wage System Based on Time Unit
The payment of wages is based on time, wages are paid based on
the length of time a person does his job, this wage can be given on
a daily, weekly, or monthly basis.
2.2.2.2 Contract Work Wage System
The Contract Work Wage system is based on a certain work
volume agreed upon by the employer and the worker in advance.
The wages paid are the total wages, from the beginning to the
completion of the agreed work, so there is no additional payment
beyond that.
2.2.2.3 Co-Partnership System
The Co Partnership system provides wages to employees in the
form of shares or corporate bonds. By providing bonds or stocks,
companies hope that workers have a sense of belonging to the
company so that they can be more productive.
2.2.2.4 Premium Wage System
The Premium Wage System allows workers to receive special
wages for extraordinary performance, for example working on
holidays, doing very dangerous work, or having a very special
skill.
2.2.2.5 Unit Yield Wage System
The unit yield wage system is generally used in industrial
companies. Employers will pay wages according to the amount of
production / results achieved by employees. This means that each
employee can receive a different wage because it calculates the
results of their work or their respective productivity18.
In general, the Wage System applied to Workers / Laborers is
Wage System Based on Time Unit.
18 Hourly
Alam S. 2014. Ekonomi Wages
untuk SMA dan=MA
Monthly Wages/173
Kelas XI. Jakarta: Erlangga
 2.2.3 Wage Structure and Scale
Article 92 Paragraph (1) of Indonesia’s Constitution No 13 the Year 2003
about Labors Law, explains that :
(1) Entrepreneurs prepare a wage structure and scale according to class,
position , service years , education and competence.
(2) Entrepreneurs reviews the wage periodically according to the
company's capability and productivity.19
From this article, we can conclude that the total wage given by
entrepreneurs/employers to workers depends on several aspects and
considerations including class, position, years of service, education and
competence. The yearly increase of the worker’s wage depends on the
ability and productivity of the company. This means that wage growth is
in relation between to 2 parties, which is Workers and Entrepreneurs.
2.2.4 Calculation of Periodic Wages
Each calculation of the amount of periodic wage increases depends on the
policies of each entrepreneur / employer. There are entrepreneurs who
apply an increase of X% / year, Rp. X / year, and so on.
Periodic Wage Calculation using the X% / Year method
Final Wages = Initial Wages x (100% + X %)

Example :
Willy works at Company X with a 5% / year salary increase. Willy's
salary in 2021 is Rp. 4,200,000. How much is Willy's salary in 2022 ?
Total Wages = 4,200,000 x (100% + 5%)
= 4,200,000 x (105%)
= 4,410,000
19
Pasal 92 Ayat (1) dan (2) Undang-Undang No.13 Tahun 2003 tentang Ketenagakerjaan
 The calculation of periodic wages in the amount of Rp. X / year can be
calculated simply using the Arithmetic Formula, which is :
Un = A+(N-1)xB
Information :
Un = Final salary
A = Starting salary
N = Period / Year
B = Salary Growth
Example :
Willy works for a company in Batam with an income / wages per month
of Rp. 4,200,000. The company increased the employee's wages by Rp.
200,000 / year. How much is Willy's salary after 12 years?
Un = 4,200,000 + (12-1) 200,000
= 4,200,000 + 11x200,000
= 4,200,000 + 2,200,000
= Rp. 6,400,000
2.2.5 Overtime Pay
Article 78 Paragraph (2) of Indonesia’s Constitution No 13 the Year 2003
about Labors Law, explains that :
"Entrepreneurs who employs worker or laborer exceeding normal working
hours as refer in paragraph (1) have to pay overtime wage."20
Article 1 Paragraph (1) of Decree of Indonesia’s Minister of Manpower
and Transmigration No KEP.102/MEN/VI/2004 about Overtime and
Overtime Wage, states that:
"Overtime is a work time which exceed 7 hours/day and 40 hours/week
for 6 work days/week regulation or 8 hours/day and 40 hours/week for 5

20
Pasal 78 Ayat (2) Undang-Undang No.13 Tahun 2003 tentang Ketenagakerjaan
 work days/week regulation or working on weekly rest days and on public
holidays according to the Government’s Regulation. "21
Article 11 of of Decree of Indonesia’s Minister of Manpower and
Transmigration No KEP.102/MEN/VI/2004 about Overtime and Overtime
Wage, states that:
(1) If workers work overtime on work days:
a.1. For the 1st hour of overtime workers must be paid 1.5 times their
hourly wage ;
a.2. For the 2nd and 3rd hour of overtime workers must be paid 2 times
their hourly wage
(2) If workers work overtime on weekly rest days and public holidays
with 6 work days regulation or 40 hours/week then:
b.1. For the first 7 hours the workers must be paid 2 times their hourly
wage, on the 8th hour the workers must be paid 3 times their hourly
wage and the 9th and 10th hour of the workers must be paid 4 times
their hourly wage.
b.2. If the public holiday falls on the shortest work days, the first 5
hours the workers must be paid 2 times their hourly wage, on the 6th
hour the workers must be paid 3 times their hourly wage and on the 7th
and the 8th the workers must be paid 4 times their hourly wage.22
(3) If workers work overtime on weekly rest days and public holidays
with 5 work days regulation or 40 hours/week then, the overtime wage
for the first 8 hours the workers must be paid 2 times their hourly
wage, on the 9th hour the workers must be paid 3 times their hourly
wage and on the 10th and 11th hour hour the workers must be paid 4
times their hourly wage.
21
Pasal 1 Ayat (1) Keputusan Menteri Tenaga Kerja dan Transmigrasi Republik Indonesia Nomor
Kep.102/MEN/VI/2004 tentang Waktu Kerja Lembur dan Upah Kerja Lembur
22
Pasal 11 Keputusan Menteri Tenaga Kerja dan Transmigrasi Republik Indonesia Nomor
Kep.102/MEN/VI/2004 tentang Waktu Kerja Lembur dan Upah Kerja Lembur
 The conclusions of some of these articles are:
Overtime : Maximum 3 hours/day or 14 hours/week
Overtime Calculation on Weekdays :
Overtime = Hourly Wages x (1.5 + 2 +
2)
Overtime Calculation on Holidays (6 Days Work/Week) :
Overtime = Hourly Wages x (2x7 Hour) + (3x1 Hour) + (4x2 Hour)
Overtime Calculation on Holidays (5 Days Work/Week) :
Overtime = Hourly Wages x (2x8 Hour) + (3x1 Hour) + (4x2 Hour)

2.3 Wages in Indonesian Law Number 11 the Year 2020

Regarding the meaning of Wage, isn’t explained in Indonesia’s Constitution No
11 the Year 2020 about Job Creation.
However, on Article 1 Paragraph (1) of Indonesia’s Government Regulation No
36 Year 2021 about Wage, states that:
"Wage are the rights for workers or laborers to received compensation in the form
of money from the entrepreneur or employer to the worker or laborer which is
determined and paid according to employment contract, agreement, or Indonesia’s
constitution, including allowances for the workers or laborers and their family for
the job and services that have been or will be performed. "23

2.3.1 Decent Livelihood Principles

Article 88 Paragraph (1) of Indonesia’s Constitution No 11 the Year 2020
about Job Creation, states that:
"Every worker / laborer has the right to a life that is decent for
humanity."24

23
Pasal 1 Ayat (1) Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan
24
Pasal 88 Ayat (1) UU Nomor 11 Tahun 2020 tentang Cipta Kerja
 The changes of Decent Livelihood Principles from the Labors Law to the
Job Creation Law is only in the use of a different words, but in substance
there is no significant changes.”
2.3.2 Wages with Time Unit and Results Principles
2.3.2.1 Determination of Wages
Article 88B Paragraph (1) of Indonesia’s Constitution No 11 the
Year 2020 about Job Creation, states that :
"Wages are determined based on:
a unit of time; and / or
b. unit of yield. "25
This article explains that the application of the District/Cities
Minimum Wages has been removed and replaced with the Unit
Yield and Time Wage.
2.3.2.2 Types of Unit Time Wages
Based on Article 15 of Indonesia’s Government Regulation No 36
Year 2021 about Wage, it is stated that:
"Wages based on the time unit as referred to in Article 14 letter a
are determined:
a. Per hour ;
b. Daily; or
c. Monthly26
This article explains that the unit time wage category is divided
into 3 categories, namely: Hourly, Daily, and Monthly.
2.3.2.3 Hourly Wages
Article 16 Paragraph (1), (2), (3) and (4) of Indonesia’s
Government Regulation No 36 Year 2021 about Wage, states that:

25
Pasal 88B Ayat (1) UU Nomor 11 Tahun 2020 tentang Cipta Kerja
26
Pasal 15 Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan
 (1) The determination of Hourly Wages can only be designated for
Workers/Laborers who work part time.
(2) Hourly wages are paid according to employment contract
between the entrepreneur and the worker/laborer.
(3) The agreement as referred to in paragraph (2) must not be
lower than the result of the calculation of the Hourly Wage
formula.
(4) The hourly wage
Hourly Wages = Monthly Wages calculation formula is
126 as follows27

From this article, it is explained that the application of Hourly

Wages is only for part-time workers with the amount of wages
determined based on the agreement of both parties on the condition
that they cannot be lower than the applicable hourly Wage
calculation formula from the Government.
2.3.2.4 Daily Wages
Article 17 of of Indonesia’s Government Regulation No 36 Year
2021 about Wage, states that:
"If the wage is determined on a daily work, the calculation of the
wage in day is:
a. For companies with 6 days/week regulation , the monthly
Wage is divided by 25 or;
b. For companies with 5 days/week regulation, the monthly Wage
is divided by 21 "28
27
Pasal 16 Ayat (1), (2),(3), dan (4) Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan

28
Pasal 17 Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan
 From this article explains that:
1. Daily Wage (6 Working Days) = Monthly Wage / 25
2. Daily Wage (5 working days) = Monthly wage / 21
2.3.2.5 Unit Yield Wages
Article 18 Paragraph (1) and (2) of Indonesia’s Government
Regulation No 36 Year 2021 about Wage, states that:
(1) The wage based on unit yield according to Article 14B is
determined in accordance with the agreed work output.
(2) The Employer shall determine the amount of Wages according
to paragraph (1) in an employment contract between the
Worker / Laborer and Entrepreneur.29
Article 19 of Indonesia’s Government Regulation No 36 Year
2021 about Wage, states that:
"Determination of a month's Wage according to unit yield referred
in Article 14B about the implementation of the regulations, is
determined on the average Wage of the last 12 months received by
Workers /Laborers. "30
From the two articles, it is explained that the unit wage received by
the Worker / Laborer in a month is determined by employment
contract between the Worker / Laborer and Employer.
2.3.2.6 Minimum Wage
Article 88C Paragraph (1) and (2) of Indonesia’s Constitution No
11 the Year 2020 about Job Creation, states that:
(1) The governor have to determine the provincial minimum
wage.

29
Pasal 18 Ayat (1) dan (2) Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan
30
Pasal 19 Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan
 (2) The governor can determine the region/city minimum wage
with certain conditions.31
Article 88E Paragraph (1) and (2) of Indonesia’s Constitution No
11 the Year 2020 about Job Creation, states that:
(1) The minimum wage in Article 88C paragraph (1) and (2)
applies to workers/laborers with a working period less than 1
year at the company.
(2) Entrepreneurs are forbidden to pay wages lower than the
minimum wage.32
These two articles explain that there is an abolition of the
Regency/City Minimum Wage set by the Regional Government. In
exchange the Govement applies the Provincial Minimum Wage
and Regency/City Minimum Wage with certain conditions that are
determined directly by the Central Government.
Furthermore, for Workers / Laborers who work for less than 1
year, the Provincial Minimum Wage or Regency / City Minimum
Wage applies with certain conditions.
2.3.2.7 Minimum Wage Exceptions
Article 90B Paragraph (1) of Indonesia’s Constitution No 11 the
Year 2020 about Job Creation, states that:
(1) The provisions of the minimum wage in Article 88C paragraph
(1) and (2) are exempted for Micro and Small Enterprises.33
Article 36 Paragraph (2) of Indonesia’s Government Regulation
No 36 Year 2021 about Wage, states that:

31
Pasal 88C Ayat (1) dan (2) UU Nomor 11 Tahun 2020 tentang Cipta Kerja
32
Pasal 88E UU Nomor 11 Tahun 2020 tentang Cipta Kerja

33
Pasal 90B Ayat (1) UU Nomor 11 Tahun 2020 tentang Cipta Kerja
 (2) Wages for Micro and Small Enterprises are determined by the
employment between the entrepreneur and the worker/laborer
in the company with the following provisions:
a. At least 50% (fifty percent) of the average consumption of
the people at the provincial level; and
b. The agreed wage value is at least 25% (twenty five percent)
above the poverty line at the provincial level.34
From the two articles, it is explained that the application of an
exempted Minimum Wage to Micro and Small Enterprise is
replaced based on an agreement between employers and workers
and in accordance to Government’s Regulations.
2.3.2.8 Violation of Wage Terms
Article 185 Paragraph (1) and (2) of Indonesia’s Constitution No
11 the Year 2020 about Job Creation, states that:
(1) Anyone breaks the law in ... Article 88A paragraph (3), Article
88E paragraph (2) ... shall imprisoned for the minimum of 1
year and maximum of 4 (four) years and be fined at least Rp.
100,000,000.00 (one hundred million rupiah) and a maximum
of Rp. 400,000,000.00 (four hundred million rupiah).
(2) The criminal offense meant in paragraph (1) is criminal offense
for Crime35
From this article, we can conclude that the entrepreneur who didn’t
pay wage according to the regulations above. They will be
punished which is imprisonement and they’ll also be fined a huge
amount of money.

2.3.3 Wage Structure and Scale

34
Pasal 36 Ayat (2) Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan
35
Pasal 185 Ayat (1) dan (2) UU Nomor 11 Tahun 2020 tentang Cipta Kerja
 Article 92 Paragraph (1), (2), and (3) of Indonesia’s Constitution No 11
the Year 2020 about Job Creation, states that:
(1) Entrepreneurs have to arrange the wage structure and scale in their
company according to the company's capabilities and productivity.
(2) The Wage structure and scale are used as guidelines for employers in
determining wages.
(3) Further provisions regarding the structure and scale of wages are
regulated in a Government Regulation.36
Article 92A of Indonesia’s Constitution No 11 the Year 2020 about Job
Creation ,states that:
"Employers carry out regular wage reviews by taking into account the
company's ability and productivity."37
From these 2 articles, we can conclude that the amount of wages given by
entrepreneurs/employers to workers depends on the ability and
productivity of the company. This means that the growth of wages yearly
solely depends on policy of one party, namely entrepreneurs.
2.3.4 Overtime Pay
Article 78 Paragraph (1) and (2) of Indonesia’s Constitution No 11 the
Year 2020 about Job Creation, states that:
(1) Entrepreneurs who employ workers/laborers exceeding regular work
hours as meant in Article 77 paragraph (2) must depend on these
requirements:
a. Agreement of the worker / laborer concerned; and
b. Overtime for a maximum of 4 hours/day and 18 hours/week. "
(2) Entrepreneurs who employ workers / laborers exceeding regular work
hours in paragraph (1) have to pay overtime wage.38
36
Pasal 92 Ayat (1) ,(2), (3) UU Nomor 11 Tahun 2020 tentang Cipta Kerja
37
Pasal 92A UU Nomor 11 Tahun 2020 tentang Cipta Kerja

38
Pasal 78 Ayat (1) dan (2) UU Nomor 11 Tahun 2020 tentang Cipta Kerja
This article explains that the agreement for overtime is based on an
agreement of 2 parties as well as the maximum overtime, namely :
Maximum = 4 hours / day or 18 hours / week
Overtime Wage Calculation
Article 31 Paragraph (1), (2), and (3) Indonesia’s Government Regulation
No 35 Year 2021 about Specific Time Employment Contract, Transfer,
Working Time and Rest Time, and Termination of Employment, states
that:
(1) Companies that employ Workers / Laborers exceeding regular work
hours in Article 2l paragraph (2) have to pay Overtime Wages which
is:
a. for the first hour of overtime the workers must be paid 1.5 times
their hourly wage; and
b. for the next 3 hours of overtime the workers must be paid 2 times
their hourly wage.
(2) Companies that employ Workers/ Laborers in paragraph (1) have to
pay Overtime Wage , if the workers work on weekly rest days and
public holidays with 6 work days regulations or 40 hours/week :
a. The calculation of Overtime Wages is carried out as follows:
1. On the first to seventh hour, the workers must be paid 2 times
their hourly wage;
2. On the 8th hour, the workers must be paid 3 times their hourly
wage; and
3. On the 9th hour to 11th hour, the workers must be paid 4 times
their hourly wage;
(3) Companies that employ Workers/Laborers referred in paragraph (1)
have to pay Overtime Wage if the workers work on weekly rest days
 and public holidays with 5 work days regulations or 40 hours/week,
the calculation for Overtime Wage is as follows:
a. On the first to the eighth hour, the workers must be paid 2 times
their hourly wage;
b. On the 9th hour, the workers must be paid 3 times their hourly
wage;
c. On the 10th to 12th hour , the workers must be paid 3 times their
hourly wage 39
Based on this article, it can be concluded that:
Overtime Calculation on Weekdays :
Overtime = Hourly Wages x (1.5 + 2 +
2)
Overtime Calculation on Holidays (6 Days Work/Week) :
Overtime = Hourly Wages x (2x7 Hour) + (3x1 Hour) + (4x3 Hour)
Overtime Calculation on Holidays (5 Days Work/Week) :
Overtime = Hourly Wages x (2x8 Hour) + (3x1 Hour) + (4x3 Hour)
2.4
Comparison Between Labors Law and Omnibus Law
From the results of the explanation above, it can be concluded that there are
several differences in Indonesia’s Contitution No 13 the Year 2003 about Labor
Law and Indonesia’s Constitution No 11 the Year 2020 concerning Job Creation,
such as:
No Substance Labors Law Job Creation
1. Decent The Decent Livelihood Principle between Labors Law and
Livelihood Job Creation Law are basically the same and there is no
Principle major changes.
2. The Concept Guided by the Minimum Guided by the Unit Yield &
of Wage Wage of City /District Time Wage
3. Category of There are 2 category of There are 2 category of

Pasal 31 Ayat (1), (2), dan (3) Peraturan Pemerintah Nomor 35 Tahun 2021 tentang Perjanjian Kerja
39

Waktu Tertentu, Alih Daya, Waktu Kerja dan Waktu Istirahat, dan Pemutusan Hubungan Kerja
 Minimum minimum wage,such as: minimum wage,such as:
Wage 1. Region/City Minimum 1. Regional/City Minimum
Wage, determined by Wage with Certain
Regional Government Conditions
2. Provincial Minimum 2. Provincial Minimum
Wage, determined by Central Wage
Government Both are determined by the
Central Government
4. Exemptions None There are exemptions of
of Minimum Minimum Wage for Micro
Wage and Small Enterprises.
5. Penalty There are no difference between Penalty on Labour Law
and the Job Creation Law
6. Wage Scale Depends on: Depends on:
Structure a. Status d. Company capabilities &
and Scale Competence productivity.
b. Education e. Position In essence, it applies
c. Years of service, unilaterally, namely the
Also depends on Company Employer who determines
capabilities & productivity. the increase in wages.
Conclusion the increase of
wage determined by both the
worker and entrepreneur.
7. Overtime Maximum Maximum
3 Hours/Day 4 Hours/Day
14 Hours/Week 18 Hours/Week

Chapter 3
Closing
3.1 Conclusion
The application of Indonesian Law Number 11 the Year 2020 concerning Job
Creation replaces Indonesian Law Number 13 the Year 2003 concerning labors
Law basically aims to improve the Indonesian economic system and attract
investors in order to open employment opportunities thus reducing the
unemployment rate in Indonesia.
Indonesian Law Number 11 the Year 2020 concerning Job Creation has changed
several wage concepts, among others, regarding the provisions of Unit of Results
and Value Wages which replace the City / District Minimum Wage system,
Enforcement of Minimum Wage exceptions for Micro and Small Enterprises, and
Wage Structure and Scale which changes to a unilateral decision, which is
dependent on Employer.
Some of these provisions have sparked controversy for Laborers / Workers in
Indonesia. The reason is because several provisions in Indonesian Law Number
11 the Year 2020 concerning Job Creation reduce Laborers’/ Workers' income
which potentially caused the Laborers/Workers not having a decent life because
they cannot fulfill their daily needs and their families. From the viewpoint of the
Laborers / Workers, they argued that with the enactment of Indonesian Law
Number 11 the Year 2020 concerning Job Creation, has revoked / reduced the
rights of Laborers / Workers and has given more rights to the Employer /
Employer which caused injustice in Law system itself.

Reference
Peraturan Perundang-Undangan
1. Undang-Undang No. 13 Tahun 2003 tentang Ketenagakerjaan
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Kerja
5. Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan
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Kep.102/MEN/VI/2004 tentang Waktu Kerja Lembur dan Upah Kerja Lembur
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