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Jerson Flores
Jerson Flores


What is SE-07/MEN/1990 and Why is it Important for Indonesian Workers?

SE-07/MEN/1990 is a circular letter issued by the Minister of Manpower of the Republic of Indonesia on August 2, 1990. The letter provides guidelines on the classification of wage components and non-wage income for workers in Indonesia. The letter aims to clarify the definition and scope of various types of wages, allowances, facilities, and bonuses that workers may receive from their employers. The letter also intends to prevent misunderstandings and disputes between employers and workers regarding wage payments.

What are the Wage Components According to SE-07/MEN/1990?

The circular letter defines wage components as follows:

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  • Basic Wage: This is the basic payment that is paid to workers according to their level or type of work. The amount of basic wage is determined by agreement.

  • Fixed Allowance: This is a regular payment that is related to the work and is given to workers and their families. It is paid in the same time unit as the basic wage, such as allowance for spouse, children, housing, cost of living, region, etc. Food allowance and transport allowance can be included in this component if they are not linked to attendance and are received by workers regularly according to the time unit, daily or monthly.

  • Non-Fixed Allowance: This is a payment that is directly or indirectly related to the worker, which is given irregularly to workers and their families. It is paid in a different time unit from the basic wage, such as transport allowance that is based on attendance, food allowance that is given based on attendance (usually in the form of money or food facilities).

What are the Non-Wage Income According to SE-07/MEN/1990?

The circular letter defines non-wage income as follows:

  • Facility: This is a benefit in the form of tangible goods that is provided by the company because of special circumstances or to improve the welfare of workers, such as vehicle facility (pick up and drop off workers or others), free meals, worship facilities, baby care center, cooperative, canteen, etc.

  • Bonus: This is not part of the wage, but rather a payment that workers receive from the company's profit or because they produce more than the normal production target or because of increased productivity. The amount of bonus distribution is regulated by agreement.

Why is SE-07/MEN/1990 Important for Indonesian Workers?

The circular letter is important for Indonesian workers because it provides a clear and consistent framework for determining and calculating their wages and other income. It also helps to avoid confusion and conflict between workers and employers over wage issues. By following the guidelines in the letter, workers can ensure that they receive fair and adequate compensation for their work. Moreover, the letter also encourages employers to provide incentives and benefits to workers that can improve their motivation, discipline, and productivity.

In conclusion, SE-07/MEN/1990 is a circular letter that defines and classifies wage components and non-wage income for workers in Indonesia. The letter aims to create a harmonious and transparent relationship between workers and employers regarding wage payments. The letter also serves as a reference for workers to understand their rights and obligations as well as their potential income sources.


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