The Bali provincial government has officially announced a 6.5% increase in the Provincial Minimum Wage (UMP) for 2025.
Effective next year, Bali’s UMP will rise to Rp 2,996,500, up from this year’s Rp 2,813,672.
The decision, based on the Ministry of Manpower Regulation No. 16 of 2024, considers three key factors: economic growth, inflation rates, and a constant reflecting the decent living needs proposed by labor unions and employers’ representatives, according to Bali’s Head of the Manpower and Energy and Mineral Resources Office, Ida Bagus Setiawan.
In addition to the UMP, the government has set the Provincial Sectoral Minimum Wage (UMSP) for tourism workers at Rp 3,025,000 for next year.
Understanding UMP, UMK, and UMSP
UMP, or the the Provincial Minimum Wage, is set at the provincial level and serves as the baseline for worker salaries across a specific province. It applies across all regencies and cities in the province (like Bali).
UMSP refers to UMP that applies for specific work sectors. In light of the recent announcement, the UMSP increase applies to those working in the tourism and leisure sector (including hospitality).
UMK, on the other hand, refers to the City/Regency Minimum Wage, which is determined at the local level and can be higher than the UMP. UMK values are often adjusted to reflect local economic conditions, cost of living, and business considerations specific to an area within a province. For example, regencies with more developed economies, such as Denpasar and Badung, typically propose higher UMK rates.
Regencies without esablished UMKs must default to the UMP, as stipulated by regulations.
Setiawan urged businesses to comply with the new wage standards, emphasizing that the increase aims to improve workers’ welfare.
“In discussions earlier, it was highlighted that comprehensive monitoring is necessary, not only from the wage council but also involving all stakeholders, to ensure the UMP and UMSP are implemented,” he stated.
Meanwhile, the Minimum Wage for Cities and Regencies (UMK) is still under deliberation, particularly for Denpasar, Gianyar, Badung, and Tabanan. The UMK for these regions will be announced no later than December 18, 2024.
For the remaining five regencies—Bangli, Klungkung, Karangasem, Buleleng, and Jembrana—their UMK will align with the provincial UMP.
“The regulation clearly states that regencies unable to set their UMK must use the UMP,” Setiawan concluded.
What This Means for Business Owners
Expat business owners in Bali should anticipate adjusting salaries for their workers to comply with the updated wage regulations.
Businesses employing local staff are required by law to meet or exceed the minimum wage standards. Non-compliance may lead to penalties and enforcement actions by labor authorities.
