Employers applaud the decision to reject Batam’s 2025 sectoral wage implementation.

Batam’s business community has responded positively to Governor Ansar Ahmad’s decision to reject the implementation of the 2025 Sectoral Minimum Wage (UMSK) in Batam. The announcement follows a period of uncertainty and was justified based on compliance with national labor regulations and economic considerations.

The Governor of the Riau Islands (Kepri), Ansar Ahmad, recently rejected the proposal for a Sectoral Minimum Wage (UMSK) in Batam for 2025, citing regulatory deadlines and economic sustainability concerns. This decision aligns with the recently approved Batam Minimum Wage (UMK), which saw a significant increase of 6.5%, making it the highest in the province.

Governor Ansar Ahmad’s decision adheres to Indonesia’s Ministry of Manpower Regulation No. 16/2024, which states that UMSK agreements must be finalized by December 18, 2024. The lack of consensus in Batam’s Wage Council rendered the proposal ineligible.

Impact on Business Stability

Chairman of the Batam Indonesian Employers’ Association (Apindo), Rafki Rasyid, noted that implementing the UMSK would burden businesses. The current 6.5% UMK increase was already higher than the anticipated 4.5%, adding financial strain to the local economy.

Current Minimum Wage in Batam

Batam’s 2025 UMK stands at IDR 4,989,600 (approximately SGD 415.13), a 6.5% rise from 2024’s IDR 4,685,050 (SGD 390.88). This makes Batam’s wage the highest in Kepri, compared to Lingga and Tanjungpinang’s minimum wage of IDR 3,623,654 (SGD 301.76).

Employers fear that setting a sectoral wage would lead to closures, especially for smaller enterprises. Apindo urged stakeholders to accept the current wage adjustment without adding the sectoral component to ensure economic resilience.

Read More: Is the 6.5% UMP Increase Just a Band-Aid for Indonesia’s Wage Disparities?

Kepri’s 2025 Provincial Minimum Wage (UMP) serves as a safety net, ensuring fair labor conditions while balancing regional disparities. The decision reflects efforts to align Batam’s growth with national directives.

Governor Ansar Ahmad’s rejection of Batam’s sectoral wage plan highlights the government’s commitment to balancing labor welfare and business sustainability. For Singaporeans and international investors, the decision underscores Batam’s focus on maintaining a stable business climate, which remains a crucial factor for cross-border economic collaboration.

The Governor of Kepri has rejected Batam’s 2025 Sectoral Minimum Wage proposal, citing regulatory compliance and business stability concerns. With the UMK already increased by 6.5%, this decision aims to prevent further strain on Batam’s economy.

Sources: Bisnis Sumatra, Antara News (2024)

Keywords: Batam Employers, Wage Policy, Governor Rejection