After millions of workers went on strike last year in Indonesia over low pay and cost of living increases, the government lifted wage rates.
But workers at the Nike factory in the west Java city of Sukabumi say they were made to sign a petition supporting the factory's claim to be exempt from paying the new wage.
In mobile phone footage of the factory, shown to the ABC, a man standing over workers can be heard telling them, "you all have to sign it".
The woman who took the footage does not want to be named, but says she and other workers tried to reject the pay restriction.
"We got summoned by military personnel that the company hired to interrogate us and they intimidated us," she said.
"The first thing that scared me was his high tone of voice and he banged the table.
"And also he said that inside the factory there were a lot of military intelligence officers. That scared me."
Unions in Indonesia say at least six Nike-contracted factories have applied to be exempt from paying the increased rate.
The Trade Union Rights Centre's Surya Tjandra says there is a loophole to get an exemption.
"You have to provide financial conditions of the company in the last two years which show some not profit, and then you have to accept some consent from the workers directly, which is not that easy because for the workers, the new wages is actually better and fairer," he said.
If the factory gets an exemption, the employees will get paid $3.70 a day instead of $4.
Activists say that after rent and transport to work, it is only enough to afford one meal.
One activist, Jim Keady, runs an American non-governmental organisation called Educating for Justice.
"I would say it is a clear violation of Nike's code of conduct and in a more general sense, the minimum wage is a poverty wage alone," he said.
"To pay less than the minimum wage I just think absolutely runs counter to Nike's public claims that they care about the welfare of their workers and they want to see them have decent lives."
In a statement, a spokesman for Nike said the company is investigating.
"Nike expects contract factory workers to be paid at least the minimum wage required by country law and provide legally mandated benefits, including holidays and leave, and statutory severance when employment ends," the statement said.
The ABC asked Nike headquarters if the company is aware of the allegations about the use of military personnel and the intimidation of workers into accepting a lower than minimum wage.
After a pause, the spokesman said he would not get into details but that the company was investigating.
Mr Keady says the situation would be easy to fix.
"You really have to break it down in human terms," he said.
"Somebody like Phil Knight, the founder of Nike. The guy is worth $10.3 billion. How much more do you need? If you made a billion less you could lift millions of people out of poverty.
"I'm not asking for charity - I don't want him to just give his money away. I'm talking about justice.
"Pay the people what they deserve. They've earned it. Give them a decent wage."
He says Nike made $2.2 billion in profits last year and it would cost $1 extra per pair of shoes to pay the minimum wage.