REPUBLIKA.CO.ID, JAKARTA - Minister of Industry MS Hidayat said government had drafted new regulation on provincial minimum salary (UMP). The formula will be implemented in capital intensive industries, human capital intensive industries, as well as small medium enterprises. 

This formula was drafted using tri partite mechanism in which included government, employers represented by Indonesian Employers Association (Apindo), as well as workers.

"This formula considers inflation rate plus 'X percent'. The X percent can only be discussed openly in tri partite forum. After we reached an agreement, then we will offer it to local government," Hidayat said recently.

The formula then will be translated into Presidential Instruction to guide provincial and district government to define worker salary. 

The increase of UMP was quite high in 2012. In Jakarta for instance, its UMP increased 40 percent which drew different responses from many parties, including government. Although the regulation cannot be revoked, but in the future government will also consider employers' capability to increase their workers' salary. 

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