indexation of income - a refund, partial or complete, loss of income of the population, which were caused by the growth of consumer prices.
In the world practice the two forms of the process described below:
• Automatic - when the indexation of salaries and other types of income is proportional to the price increase.
• Semi-automatic (ie, contract), the essence of which is in negotiations with government representatives, trade unions and employers, as well as to attract experts.This form of indexation applied in the European Union and the result of these negotiations is to create recommendations, sets a lower threshold of social protection for collective bargaining.
Labor Code introduced an article undertakes all employers to carry out wage indexation.At the same time the Labour Code does not set any deadlines, or the size of wage increases.These parameters every employer is required to identify itself in the agreements, the LDF or collective agreements.
indexation of wages, as we have said, is related to the concept of increase in consumer prices.The calculation of this index on a monthly basis according to the method of the SSC, and characterizes the level of change in spending on consumer goods and paid services in the current period compared to the previous.The Index is calculated both in individual regions and in Russia as a whole.
employer may not produce the increase of salaries of the employees on the value of it posted by Rosstat.The duties of the company includes a periodic review of the level of wages.The rise in prices for consumer goods and services is the reason for the increase in wages in order to maintain it at the level of real content, as well as the purchasing power of workers.Therefore Rosstat information are regarded as the minimum wage rate index.At the same time guided by the principle of freedom of choice of the employer, independently establishes working conditions to employees (but they must not impair their financial situation and infringe on the rights).
To determine the size of the wage indexation, except the index of consumer prices, may be taken into account and other data, for example, the growth of a living wage, calculated for the working population, or the rate of inflation.
wage indexation provides:
- indexing mechanism - that is its size.That's what we talked about above.
- Frequency of its holding.
periodicity of indexation is also defined in the agreements, the LDF or collective agreements.It can be any - annual, half-yearly, quarterly or monthly.
indexing wages differs from its increase - they are two different concepts.For example, if in budgetary institutions occur periodically minor salary increases or tariff rates, the increase in the size of awards, such an increase can not be called indexation of wages, since there do not understand the conditions to increase the employee and are not covered by local acts as indexing.In labor disputes are often dealt with such cases, when there are such differences between employers and employees about the nature of the work to increase wages.
Therefore, the selected head gear, as well as the periodicity of wage indexation necessarily primarily fixed in the collective agreement or the LDF.The absence of these documents, the provisions on the indexation of salaries of employees qualified during inspections of labor inspection as a violation of labor laws, and is fraught with penalties.
