1. Act No.13 Year 2003 concerning Manpower (Indonesia State Gazette Year 2003 No. 39, Supplement to State Gazzete No. 4279);
2. Act No. 32 Year 2004 concerning Residential Government (State Gazette Year 2004 No.125, Suplement to State Gazette No. 4437 );
3. Government Regulation No.25 Year 2000 concerning Government and Provincial Authority as Autonomy Region (State Gazette Year 2000 No.54, Supplement to State Gazette No.3952);
4. Presidential Decree No.107 Year 2004 concerning Provincial Wages Councils;
5. Presidential Decree No.187/M Year 2004 concerning Formation of Integrated Indonesia Cabinet;
6. Decree of Minister of Manpower No.01 Year 1999 jo. Decree of Minister of Manpower and Transmigration No. 226/MEN/2000 concerning Minimum Wage;

Article 1

Under this Ministerial Regulation, the following definitions shall apply:

1. Decent living needs, herein after abbreviated to (KHL / Kebutuhan Hidup Layak), is need standard that shall be fulfilled by a single employee/ labourer physically, non physically, and socially to live decently for 1 (one) month.
2. Provincial/Residential Wage Councils is non structural tripartite institution, formed by Governor/ Regent/ Mayor, that is responsible to give suggestion and consideration to Governor/ Regent/ Mayor in setting minimum wage.

Article 2

1. Decent living needs as the base to stipulate minimum wage are the improvement of minimum living needs.
2. Decent living needs aforesaid in subsection (1) consist of the components as mentioned in the Attachment I of this Ministerial Regulation.

Article 3

1. Decent living needs (KHL) rate is based on price survey.
2. Price survey aforesaid in subsection (1) is conducted by team which consists of tripartite elements, formed by Provincial Wage council and/ or Residence/ City.
3. In condition that Wage Council have not been formed in Residence/City, price survey is conducted by team formed by local government.
4. Tripartite element aforesaid in subsection (2) which represents Government shall involve Central Bureau of Statistics.
5. Price Survey of KHL is conducted according to the guide as mentioned in Attachment II of this Ministerial Regulation.

Article 4

1. Based on price survey aforesaid in Article 3 subsection (5), Wage Council or local government (regent/mayor) stipulates minimum wage.
2. Decent living needs (KHL) rate aforesaid in subsection (1) is used as one of matters considered in stipulating minimum wage.
3. Minimum wage stipulation aforesaid in subsection (2) is valid for employee/ labourer with less than 1 (one) year service period.
4. Wage for labourer/ employee with 1 (one) or more year service period is discussed in bipartite level between employee or labour union and employer in respective company.
5. Governor stipulates provincial minimum wage based on the lowest local KHL rate in respective province with considering productivity, economy growth, and marginal business.
6. Productivity aforesaid in subsection (5) is the comparison between Bruto Regional Domestic Product (PRDB) and the number of manpower at the same period.
7. Economy growth aforesaid in subsection (5) is the growth of PRDB rate.

Article 5

1. Decent Living Needs (KHL) fulfilment in minimum wage stipulation is implemented gradually.
2. Decent Living Needs (KHL) fulfilment phase aforesaid in subsection (1) is stipulated by governor.
3. In stipulating Decent Living Needs (KHL) fulfilment phase aforesaid in subsection (2), Governor observes job market condition, marginal business in the Province/ Resident/ City as well as suggestion and consideration by Provincial/Residential Wage councils.

Article 6

By stipulating this Ministerial Regulation, Decree of Minister of Manpower No.KEP.81/MEN/1995 concerning stipulation of minimum living needs component shall herewith be declared null or void.

Article 7

This Ministerial Regulation shall be effective upon the date of its promulgation.

Stipulated in Jakarta

On August 26, 2005

MINISTER OF

MANPOWER AND TRANSMIGRATION OF

REPUBLIC OF INDONESIA

FAHMI IDRIS

Copy in accordance with the master

Head of Legal Bureau

Myra M. Hanartani

NIP. 160025858