Reconstructing Wage Law in the Contemporary Era: A Pancasila Justice and Maqāṣid al-Sharī‘ah Perspective

The wage system in Indonesia, particularly in East Java Province, reveals a significant gap between normative regulations and practical realities. Current wage practices, which inadequately protect informal workers and casual laborers, highlight weak safeguards for basic economic rights and the lack of distributive justice as mandated by Pancasila and the principles of maqāṣid al-sharī‘ah. This study seeks to reconstruct the legal concept of wages not only in a formal–legal sense but also substantively, by integrating the principles of justice embodied in Pancasila and maqāṣid al-sharī‘ah as ethical and normative frameworks. Employing a juridical–normative and sociological approach, the research involved a review of labour legislation, an analysis of judicial decisions related to wage disputes, and in-depth interviews with workers, labour unions, employers, and officials from the Manpower Office (Disnaker) in three major industrial cities of East Java: Surabaya, Sidoarjo, and Gresik. The main findings indicate that: (1) the wage system in East Java remains dominated by the minimum wage approach, which fails to reflect contextual justice and balanced labour relations; (2) employers often resist implementing wage structures and scales due to weak law enforcement; (3) the values of ḥifẓ al-māl (protection of wealth) and ḥifẓ al-nafs (protection of life) in maqāṣid al-sharī‘ah align with the welfare principles of Pancasila but have yet to be adopted as a legal paradigm in wage policy formulation; and (4) there is an urgent need to reformulate wage law with justice as its foundational principle rather than focusing solely on the technocratic aspects of minimum wage regulation. This study contributes a conceptual model of wage law grounded in the integration of Pancasila’s justice philosophy and maqāṣid al-sharī‘ah, offering a framework for a more equitable, adaptive, and culturally responsive wage policy in Indonesia.