Workers Decry Social Security Contributions

By webadmin on 04:05 pm Feb 07, 2013
Category Archive

Jakarta Globe

Several thousand workers from across Greater Jakarta gathered at various locations in the middle of the city on Wednesday demanding the government to reduce their monthly social security contribution.

The president of the Federation of Indonesian Metal Workers Unions (FSPMI), Said Iqbal, said that the workers were adamant that employers, and not them, should pay monthly social security premiums.

“We also ask that the workers who earn less than the minimum wage be covered by the social security scheme and exempted from paying premiums,” he said.

Under the 2004 National Social Security System (SJSN) Law, workers are required to pay 2 percent of their monthly salary into the social security fund, with their employers contributing 3 percent of the same base salary.

Union officials have proposed that the worker’s contribution start at 1 percent and gradually increase to 2 percent.

Said, whose federation organized the rallies, said the workers also wanted the government to instate mandatory pensions for retiring private-sector employees by July 2015. Currently, only civil servants are entitled to a pension for life.

The protesters also rejected a newly revised Manpower Ministry regulation that calculates the minimum wage based on the cost of items that workers are expected to buy. Unions have long argued that the Reasonable Living Cost (KHL) index derived from this calculation, which is then used to determine the minimum wage, is unrealistically low. This is despite the fact that the ministry has revised up the total number of components in the index to 64 from 48.

The unions are pushing for a total of 86 components.

The workers staged their rallies at the Hotel Indonesia traffic circle, outside the State Palace, in front of the House of Representatives and outside the Ministry of Manpower and Transmigration, all in Central Jakarta.

The rallies prompted police to divert traffic from the affected streets, causing worse congestion than usual in surrounding streets.

In addition to the FSPMI rallies, a group of several hundred workers gathered outside City Hall in Central Jakarta to urge the governor, Joko Widodo, to enforce the 2013 minimum wage in Jakarta that was announced at the end of last year.

The monthly minimum wage of Rp 2.2 million ($227) is a hefty 44 percent increase from the 2012 standard. This prompted scores of businesses to apply to the city administration for an exemption from having to pay it.

Joko agreed to meet with representatives of the protesters. Afterward he told reporters the representatives had aired their grievances about employers refusing to pay them according to the new minimum wage.

“They asked that the city administration ensure compliance with the new minimum wage by visiting every factory in the city, especially in the industrial estates,” he said, as quoted by Okezone.com.

“There are obviously sanctions in place for businesses that don’t comply, but keep in mind that they’re allowed to request an exemption.”

Joko added he not yet received any exemption applications.

However, the worker’s claim that at least 46 businesses are refusing to pay the new wage on the grounds that they have been granted exemption by the city administration.

“I’ll immediately call in the city manpower office chief and ask him about the process,” Joko promised.