The 2026 provincial minimum wage (UMP) in Indonesia is still under discussion and has not yet been officially announced. The government may cancel the announcement of the new wage determination formula on November 21, 2025, due to a Constitutional Court (MK) ruling.
This has an impact on the basis of the 2026 UMP determination rules, which need to be revised. Currently, the wage formulation is still being discussed by the National Wage Board (Depenas) and Provincial Wage Boards through social dialogue between the government, employers, and labor unions.
One thing that remains an obstacle to agreement is the amount of a certain index or alpha value:
- Trade unions propose an alpha of 0.9 - 1. While in the sectoral alpha is at 1 - 1.5.
- Employers peg alpha in the range of 0.1 - 0.5 and sectoral alpha 0.1- 0.7.
- The government proposes an alpha value of 0.2 - 0.7 and a maximum sectoral alpha of 1.
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In various regions, labor organizations are demanding that the formulation for determining the 2026 UMP be decided transparently. Central Java, as the region with the lowest UMP and being the main investment relocation destination, faces a dilemma between labor demands to raise wages and maintaining policies to keep investment safe.
Things to note:
- The determination of the 2026 UMP will be an important indicator of the direction of labor policy and people's purchasing power.
- Social dialogue between the government, employers, and workers is key to reaching fair and sustainable decisions.
Read the related review here.
