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Regarding the requirements for wage indexing

18.02.2019

Due to growth of consumer prices of goods and services, the Labor Code of the Russian Federation provides increase in the level of actual content of the wages within the framework for indexation.

According to a position of the Ministry of Labor, indexation is understood as increases in wages to the level of the rate of inflation.

Moreover, as noted by the Ministry of Labor, the employer also has the right to independently decide on the increase in the amount of wages to certain categories of employees.

At the same time, in accordance with court practice, the increase in consumer prices for goods and services is the basis for the indexation of wages of workers, but not the mandatory amount of such indexation; thus the employer may choose the criteria for indexing wages and how to implement it.

According to the position of Ministry of Labour and Social Protection of the Russian Federation and judicial practice, salary increase can extend to all payments established to the employee, or only to some of them (for example, only salary).

The Supreme Court of the Russian Federation mentioned that the employers who are not receiving budget financing, have the right to establish independently indexation and conditions for its implementation:

• Frequency of indexation
• Rules for determing the amount of indexation
• List of the payments which are subject to indexation,
taking into account specific circumstances, specifics of activity and level of solvency of the company.

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