Sportswear giant Nike is investigating claims that one of its supplier factories in Indonesia is allegedly paying military personnel to intimidate employees into working for less than the minimum wage.

Workers at the footwear factory in the city of Sukabumi say they were made to sign a petition supporting the factory's claim to be exempt from paying higher wages, which were put in place by the government last year, the ABC reported.

According to the report, workers claim that those who tried to reject the pay restriction were summoned by military personnel who interrogated and intimidated them.

Companies that are not profitable and have worker support are able to gain an exemption from the new wage rules, the ABC reported, with exempt factory workers being paid A$3.70 a day instead of $4.

Reportedly, at least six Nike-contracted factories have applied to be exempt from paying the increased rate.

"The Nike Code of Conduct is very clear: Nike expects contract factory workers to be paid at least the minimum wage required by country law and provided legally mandated benefits, including holidays and leaves, and statutory severance when employment ends," a Nike spokesperson told just-style.

"We understand that some factories within the Nike contract supply chain in Indonesia have chosen to engage with their local governments to discuss the new wage levels and their implementation.

"We expect such conversations to take place within the provisions of the legal framework in Indonesia."