Are You Working in Hospitality Industry? Here's The Rule of Its Salary

If you are paid the minimum wage, then here are the two components of your salary:

1. Wages without benefits; or

2. Basic wages and fixed allowances.

A component of pay in the form of fundamental compensation that is provided to workers according to the kind or degree of labor for which the quantity has been established in accordance with the agreement is known to as the basic wage.

While Non-permanent allowances are parts of salaries that are paid directly or indirectly, belong to employees, and are provided to employees and their families on a non-permanent basis without being paid in combination with basic pay. 

Fixed allowances are recurring payments to employees that are not dependent on their presence or the accomplishment of certain job goals.

Is Your Tips Part of Your Salary?

Service money or tips for employees working in hospitality industry, like hotel, are stated in Regulation of the Minister of Manpower Number 7 of 2016 concerning Service Fees for Hotel Business and Hotel Restaurant Business (Permenaker No. 7 Tahun 2016). 

In addition to the tariff that was previously decided in the context of services for the hotel business and the restaurant business within the hotel, service fees are also calculated. Service fees are non-wage payments made to employees who have a working relationship with employers based on a PKWTT or a specific time work agreement (PKWT).

Provisions for the distribution of hotel service fees in which the employer collects and manages service fees prior to distribution. Every month before service fees are paid out, the employer will notify the workers in writing of the results of service fee management and collection.

So, it can be said that the service charge is not included in the minimum wage. Consequently, when determining how much minimum wage to pay employees, employers are not allowed to put in the service charge component.