An employee's salary is subject to indexation, that is, an increase in accordance with the rising cost of living. What will be the specifics of the procedure in public and private enterprises, the general procedure, as well as which payments are subject to it and which are not. How salary indexation is carried out: calculation of coefficients and payments.

As Article 134 of the Labor Code states, employers should increase wages along with the rise in consumer prices. This is called indexing. Letter of Rostrud No. 1073-6-1 indicates that the regulations of the employing organization must establish the procedure for its implementation, which each such organization is free to establish independently.

And although the legislation clearly indicates that indexation is mandatory, it does not provide specific instructions on how often the procedure should be carried out, or how to calculate the amount of indexation. Thus, this is left to employers, which allows unscrupulous management not to take this norm into account and not carry out indexation for 2-3 years in a row.

The absence of a unified regulation gives rise to many ambiguities and conflicts between employers and employees or regulatory authorities. In particular, the following questions often arise:

• What should be indexed – only , or also the variable?
• How often should indexing be carried out?
• How should it be legally formalized?
• What indicators should be taken as a basis when calculating its size?

As for the latter, if you rely on , it is worth considering price increases as the best guideline. In addition to it, indicators such as inflation and the cost of living for the working population can be used as a criterion for indexation. Both federal and regional indicators can be taken.

Indexing Features

In budgetary organizations

In them, salaries are indexed according to the orders of government bodies. Thus, in 2017, indexation is simply not carried out, however, starting from January 1, 2018, it will be carried out at a rate of 4%. In general, the Federal Law “On the State Civil Service of the Russian Federation” states that it should be carried out annually, and the inflation rate is taken as a basis.

In commercial organizations

Wage indexation, as already noted, is not regulated very clearly; in particular, the Labor Code does this only in general terms. Therefore, in a commercial organization, the employer himself determines how often it should be performed (but if this is done less than once a year, then he may have problems), and what indicators to tie it to. The main nuances of indexation should be determined by the internal regulations of the enterprise.

If there are no mechanisms for indexing at the enterprise, and as a result it is not carried out, this is a violation of the law and should entail fines.

Employees have the right, within three months from the moment the violation was discovered, to file a lawsuit and demand indexation and payment of the amounts that the organization underpaid them.

Sometimes the management of commercial organizations assures their employees that indexation is carried out only for those who work at state-owned enterprises. This is incorrect, and if a company does not have a clearly regulated indexation procedure, then this is considered a violation of labor laws. According to Article 5.27 of the Code of Administrative Offenses, the following fines are imposed: for an official or private entrepreneur - 1,000-5,000 rubles, for a legal entity - 30,000-50,000 rubles. In addition, if a violation of the law has already been recorded in a company, it will be checked more often in the future.

Implementation procedure

It must be set out in a document that guides the enterprise when carrying out indexation. When it is carried out for the first time, a corresponding normative act is adopted. Employees must review the document and sign to confirm this.

If an employee is just being hired, then he must be familiarized with the indexation document immediately so that he has an idea of ​​the procedure for its implementation. The Employment Agreement also records information about it, and when wages change, the corresponding changes in it are recorded in an additional agreement.

That is, the order of indexing will be as follows:

• A local act is adopted indicating the conditions for its implementation, or amendments are made to an existing one.
• Employees are familiarized with this document.
• The manager issues an order to carry out indexation.
• Staff are also familiarized with it.
• The staffing table, to which changes have been made, is approved.
• An additional agreement is added with instructions on changes in wages.

There are two main methods of indexation; it can be either retrospective, that is, taking into account the rise in prices or inflation over the past period, or expected, that is, carried out in advance, taking into account the expected rise in prices.

Which payments are indexed and which are not?

It is necessary to index only the constant part of the salary - that is, the salary or tariff rate. But the obligation to index additional payments, such as food and financial assistance, is not imposed on the employer.

Various ones are often tied to wages and are paid as a percentage of it, that is, they change along with it, which does not require separate calculations.

However, those that are indicated in regulatory documents in the format of exact numbers will not be indexed. Therefore, it is advisable to carry out indexation separately for such payments, also including them in the document according to which it is carried out.

It is worth noting an important point: employers sometimes believe that if they increase employee wages, then indexation is not necessary. But this is not true, since salary increases and indexation are carried out in different ways and have different goals: the salary can be increased for one employee or part of it, for some it can be increased by 10%, for others by 30%, and so on. Here, everything depends solely on the will of the employer and his considerations regarding the need for this or that employee for the company. That is, the salary increase is intended to interest the employee in continuing to work for the company and benefit it. Indexation is needed to bring the wages of all employees in accordance with changes in consumer prices over the period and maintain their quality of life at the same level. Therefore, it provides for a simultaneous increase in wages by the same percentage for all employees of the enterprise.

How to calculate the indexation coefficient?

The calculation will depend on the parameter to which it is linked. Minimum indexation usually corresponds to the level of core inflation and is carried out either quarterly or semi-annually.

Let us give an example of wage indexation carried out at the end of the quarter for the second quarter of 2017. Inflation in April was 0.33%, in May 0.37%, and in June 0.61%. If the employee’s salary was 35,000 rubles, then for April it should be 100.33% of this amount, that is, 35,000 x 1.0033 = 35,115.5 rubles. For May 35,115.5 x 1.0037 = 35,245.43 rubles. For June 35,245.43 x 1.0061 = 35,460.42 rubles.

As a result, wages should rise by a little more than 460 rubles. It is worth noting that inflation in 2017 is low, and at the end of the year it will probably be in the range of 2–2.5%, but if calculated for some previous years, when it was 4–5 times higher, the figures would be significantly more impressive .

This is retrospective indexation, now we will give an example of what is expected: for example, the consumer price index from the Federal Statistics Service is used for calculation. Thus, the forecast for 2017 was 3.2%, which means that the expected indexation should have been carried out as follows: at the end of 2016, perform a recalculation and, if the employee’s salary was the same 35,000 rubles, raise it by 3.2%: 35 000 x 1.032 = 36,120 would be wages from the beginning of 2017.

An important nuance is taking into account indexing in . If it was carried out during the billing period, then all payments should be increased in accordance with the conversion factor. So, if wages are raised by 3.2% from the previous example, then the conversion factor will be the same (1.032). All payments made during the billing period must be adjusted to the indexed one. This means that if the calculation period included 6 months of 2016 and six months of 2017, then the coefficient should be applied to those relating to 2016.

If indexation takes place directly on , then only payments for days starting from the date of its implementation will be indexed.

For example, if an employee is on vacation from June 1 to June 30, and indexation took place on June 21, then for the period June 1-20 he will receive regular payments, and for June 21-30 - with the coefficient applied to them. Salary indexation can also be approximately calculated if you use an online calculator, of which you can now find many on the Internet.

An indexation system for payments made to individuals has been introduced at the federal level. This is necessary to minimize the negative impact on the purchasing power of the population due to inflationary processes. Social benefits, pensions and some incomes of employed persons are subject to recalculation. Indexation implies that the base value is multiplied by a deflator coefficient, the resulting result will be equal to the guaranteed minimum payment indicated by law, but taking into account the changed price level in the country.

Benefit indexation coefficient

The amount of social benefits paid to different categories of the population is reviewed annually. Their value changes as of February 1. This procedure for fixing benefit amounts was introduced by Law No. 444-FZ dated December 19, 2016. The following payments are subject to adjustment:

for persons exposed to radiation (consequences of the Chernobyl accident, Mayak PA, tests at the Semipalatinsk test site);

citizens in the status of Hero of the Russian Federation or the USSR, Hero of Labor;

veterans;

parents of minor children (a set of monthly and one-time payments);

for invalids;

due to the need to pay for funerals;

for persons injured as a result of an accident at work.

The indexation coefficient for 2018 was set by the Government at 1.025 (Resolution No. 74 dated January 26, 2018). This indicator is applied not to the base value approved by federal laws, but to the indexed amount of the previous year. For example, birth benefits are established by Art. 12 of Law No. 81-FZ of May 19, 1995 in the amount of 8,000 rubles. From February 2018, the payment is set in the amount of RUB 16,759.09. This figure was obtained by multiplying last year's benefit value by a deflator of 1.025 (16,350.33 x 1.025).

The indexation coefficient by year for social benefits is presented in the table:

On what date was the benefit recalculated?	Indexation coefficient size
January 2008
January 2009
January 2010
January 2011
January 2012
January 2013
January 2014
January 2015
February 2016
February 2017
February 2018

Pension indexation coefficient

Law No. 400-FZ dated December 28, 2013 provides for a rule for recalculating the insurance pension to the inflation index annually (the adjustment is made to the level of price changes over the past year). Additionally, it is possible to revise the amount of pensions in April in accordance with the remaining funds at the disposal of the Pension Fund (if any).

Insurance pensions (non-working pensioners) in 2018 were indexed by 3.7% (coefficient 1.037). The cost of one pension coefficient has been increased by the same factor (it amounts to 81.49 rubles). Social pensions have been increased by 2.9% since 04/01/2018 (coefficient 1.029).

But this scheme has been suspended since 2019. The 2019 indexation coefficient will be applied according to new rules introduced during the pension reform. Legislators suggest that raising the retirement age will allow the Pension Fund to increase the size of monthly payments at a faster pace than inflation (but only for non-working people of retirement age). Indexation of 7.05% is planned for January 2019 (in monetary terms, the average increase will be 1,000 rubles); by 2024, the goal is to increase pensions by 35%.

Wage indexation coefficient

The need for indexation in relation to the income of hired personnel is provided for in Art. 134 Labor Code of the Russian Federation. This procedure is necessary to bring the earnings of employed persons into line with the level of inflation, so that wages do not depreciate. Indexation is carried out taking into account official inflation data published by government agencies, or according to other coefficients specified in the local legal acts of the enterprise.

Depending on how indexation is carried out by the employer, wages may increase or decrease. The legislation does not have a unified scheme for revising the earnings of employees in connection with the changed level of inflation. Employers independently develop a mechanism for adjusting fixed parts of wages and set the frequency of recalculation (but at least once a year).

The wage indexation coefficient can be tied to the following parameters:

to the level of inflation at the state or regional level;

to the adjustment coefficient indicator, which is approved by the employer.

Calculation of the indexation coefficient for the minimum wage involves the derivation of a numerical value of the growth rate of the minimum wage. For example, since May 2018, the minimum wage has been 11,163 rubles, and from 2019 this figure will be 11,280 rubles. The calculation of wage indexation for this parameter will be carried out as follows:

The correction factor is displayed - 1.01 (11,280 / 11,163).

The coefficient is multiplied with the fixed part of the salary. For example, if the salary is 15,000 rubles, after indexation it will be 15,150 rubles. (15,000 x 1.01).

How to calculate indexation by inflation level - the forecast indicator of inflation changes is taken as the basis for recalculation. For example, inflation is planned for 2019 at 4.3%. When recalculating, the salary will be increased to 15,645 rubles. (15,000 + (15,000 x 4.3%)). You can use indices of inflation changes over past periods as a basis.

The indexation coefficient for wages for hired personnel is applied to the salary from the staffing table, if this is the first indexation after the approval of salaries, or to the previous value of a previously changed salary. Indexation differs from a salary increase in that the percentage of adjustment for all categories of employees is the same (no changes are made to the staffing table).

For employees of the public sector, separate regulations are established for the revision of salaries in connection with inflation. A requirement common to all employers is that indexation is a mandatory procedure regardless of the level of established salaries.

Indexation is an increase in wages taking into account rising prices for products and services. It is necessary to maintain the purchasing power of citizens.

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What it is?

Wage indexation is an increase in the nominal amount of wages taking into account the inflationary growth in the cost of consumer goods and services over a period of time.

It is carried out to preserve and restore the purchasing power of the income received by employees.

Indexing can be done in two ways:

• retrospective – taking into account the prevailing price level for the previous period;
• expected - with a reference to the expected level of price increases.

Economic justification for the need

The need for indexation is determined by the loss of purchasing power of workers. Prices are rising, but they receive the same amount of money as before. As a result, their standard of living falls.

To prevent such a situation and respond to changes in a timely manner, indexing is used.

Regulatory normative documents

The main legal act that establishes the obligation of employers to carry out indexation is the Labor Code of the Russian Federation. This provision is enshrined in Article 134 of the Labor Code of the Russian Federation.

This norm determines that indexation in budgetary institutions is carried out in the manner prescribed in regulations, and commercial employer organizations are guided by their own documents - local acts, agreements, etc.

Thus, the legislator leaves the resolution of this issue to the discretion of the subjects of labor law, and the law on indexation has not been adopted. Another thing is that employers rarely include an indexation clause in their documents.

Typically, this situation occurs exclusively in large corporations. Small companies do not always have a collective agreement, but if there is one, it does not contain a specific indexation procedure.

Plus, employers use the following formulation: “If the employer has financial capabilities.” That is, indexation is carried out solely at the discretion of the company.

Conducted by whom?

Indexation is carried out by companies, firms, institutions, organizations and other entities that involve hired workers in performing labor functions.

In this case, their organizational and legal form and form of ownership do not play a role.

Who is entitled to it?

Wage indexation is carried out for all persons who work under an employment contract.

This opinion is confirmed by the ruling of the Constitutional Court of the Russian Federation. There are no exceptions to this rule established by law.

When is it not charged?

The employer is not obliged to index employees who work on the basis of a civil law agreement.

They are not subject to labor legislation, including Art. 134 Labor Code of the Russian Federation.

Periodicity

How often indexation will be carried out depends on the provisions established in local acts or a collective agreement.

This information must be available for review by every employee. Information is presented in the most understandable and convenient form.

Indexation should be carried out when the consumer price index for products on the market exceeds 101%.

It must be carried out only from the 1st day of the month following the one in which the inflation index was officially published.

The responsibility for calculating it lies with Goskomtsat. He submits data no later than the 10th day of the month following the one in which the report was prepared and information about changes in the price index was published.

Here's an example: in March the value of the consumer price index was transformed. Wage indexation will be carried out not in March, but in May according to March information. This happens because the consumer price index will be published before April 10.

Annual salary increase or indexation? What to choose?

Annual salary increases and indexation are different concepts. In the first case, the employer voluntarily increases the wages of employees.

In this case, the inflation rate is not taken into account. The amount can change to any figure depending on the wishes of the employer. Thus, increasing wages is an issue that is completely within the free decision of the company, organization that uses hired labor.

Indexation is the responsibility of the employer. Moreover, the fact of an annual increase in wages does not affect the procedure for its execution.

That is, an employer can increase wages for its employees, but this does not exclude the obligation to index it in the prescribed manner.

Salary indexation in 2019

The wage indexation procedure in 2019 did not undergo any changes. Budgetary organizations carry out it in the manner approved by regulations.

Employing companies will decide this issue at their own discretion.

As before, the indexing system has a serious drawback - a delay of two months. This is exactly the period needed for its implementation.

Latest economic news

Questions about inflation are always of keen interest to citizens of the Russian Federation. If employees of commercial organizations have to rely on the integrity of their employer, then public sector employees have to rely on the decision of government bodies.

In the first case, there is no need to rely on a collective agreement:

• firstly, there is not always a clause about indexing;
• secondly, most likely, the employer has included a clause regarding its financial capacity.

By the way, this concept is all vague. Many employers may cite the crisis and the fall in their own income as grounds for refusing indexation.

Will there be an increase in public sector salaries?

This issue remains closed at the moment. It is possible that indexation will be carried out after October 1, 2019.

However, you can’t count on an increase yet.

We remind you that due to the budget deficit, the Ministry of Finance is taking measures to save money, including at the expense of public sector employees.

Another innovation is that indexation will not be carried out taking into account inflation. Now this level is determined in the budget law.

Indexation for public sector employees directly depends on the will of government authorities. There are currently no data regarding this procedure in 2019. Whether there will be an increase or not is still unknown.

An employer's obligation or right?

The issue of the obligation of employers to carry out indexation is controversial.

In accordance with the Labor Code of the Russian Federation, employees have the right to claim increased material support due to rising prices. However, they leave the resolution of the issue to local acts that apply at a particular enterprise.

The Constitutional Court of the Russian Federation has repeatedly expressed its opinion on this issue, emphasizing that indexation is the responsibility of the employer.

It also determines the unambiguous interpretation of labor legislation.

Indexation issues, according to the Constitutional Court of the Russian Federation, can be addressed both in a collective agreement and in an employment agreement concluded with a specific employee.

Rostrud also supports this interpretation of the norms of the Labor Code of the Russian Federation.

This body establishes the employer’s obligation to necessarily include clauses on indexation in local acts or a collective agreement.

Ignoring this requirement will be considered a violation of the law.

What documents of the organization is it secured?

In accordance with Article 134 of the Labor Code of the Russian Federation, indexation is carried out on the basis of the rules defined in local regulations, collective agreements or agreements.

A local regulatory act is a document that is valid within a specific enterprise and applies to all employees and the employer himself. It provides provisions that are not regulated by labor legislation. For example, the procedure for wage indexation.

The concept of a collective agreement is approved in Article 40 of the Labor Code of the Russian Federation. In accordance with this norm, this is a legal act that establishes the procedure for regulating social and labor relations between the employer and employees.

All parties to the collective agreement sign it.

Position (sample)

The indexation procedure can be fixed in the Regulations on remuneration.

Please note that this process involves a certain system of increasing wages. This takes into account price increases and inflation levels.

When applying for a job, an employee must familiarize himself with the local regulations in force within a particular enterprise, including the Regulations on Remuneration, which approves the indexation process.

If new conditions for increasing wages at the rate of inflation apply within the company, then additional agreements must be concluded with existing employees that define the corresponding changes.

The Regulations on Remuneration establish the following standards:

• timing of indexation;
• calculation formula;
• period for accepting new amounts.

Order

Salary indexation can be issued by order. This is possible when the indexation clause is specified in the employee’s employment contract.

All employees must be familiar with the order against signature.

Example of an order:

Example of an order

Existing procedure

The indexation procedure for non-budgetary workers is determined by local acts that operate within the enterprise.

Usually it approves the formula for calculating the amount of the increase, as well as the timing and frequency of this procedure.

State employees can only rely on the will of the legislator, who will determine the procedure, timing and size of indexation.

For government organizations

Organizations that receive funding from the budget index salaries in accordance with the procedure approved by labor legislation and other regulations.

Thus, in 2019, the legislator did not provide for the possibility of increasing wages for certain categories of civil servants.

The Federal Law “On the State Civil Service of the Russian Federation” establishes annual indexation taking into account inflation for employees of the Presidential Administration, the government apparatus, and the central office of the Ministry of Foreign Affairs. But these expense items are not provided for in the adopted budget.

For private and commercial companies

We have repeatedly noted that the indexing procedure is established by internal documents. Indexation in private companies is regulated exclusively by Article 134 of the Labor Code of the Russian Federation.

How to calculate? Examples

The calculation of indexation can be carried out taking into account the consumer price index.

The following formula is used for calculation:

I = D × Ipc: 100,

• I – indexation amount;
• D – salary amount;
• IPC – consumer price index.

The consumer price index must exceed 100%, then mandatory wage indexation will be carried out from 2019. For example, in 2019 this figure increased to 102.2%.

15000*102.2/100=15330 rub.

The amount of the increase will be 330 rubles.

How to take into account when calculating vacation pay?

When calculating vacation pay, average earnings for 12 months are taken into account.

If indexation is carried out during the billing period, then when calculating the amount, all payments are increased by a conversion factor:

• Z1 – monetary allowance after indexation;
• Z0 – monetary allowance before indexation.

Wage indexation in 2016

Salary indexation in 2016 is an increase in the salaries of all employees of the organization. Typically, their tariff rates (official salaries) are increased by a certain factor.

When tariff rates (official salaries) are increased by a certain factor, wages in 2016 increase for all employees of the enterprise. But the employer can increase the salary (tariff rate) of individual employees (for various reasons) or employees of certain departments selectively by different coefficients.

Where is wage indexation regulated in 2016?

Based on the literal interpretation of the concept of “state guarantee,” the employer cannot, at his own discretion, change or cancel the guarantees declared by the state. It follows from this that wage indexation in 2016 is the responsibility of the company. Both Rostrud specialists agree with this (letter No. 1073-6-1 dated April 19, 2010) and the arbitrators of the Constitutional Court of the Russian Federation (Determination No. 913-O-O dated June 17, 2010). However, the difficulty lies in the fact that the legislation does not establish an indexation mechanism - neither the procedure nor the conditions for its implementation are defined.

Wage indexation is mentioned only in Article 134 of the Labor Code of the Russian Federation. State employees carry it out in the manner established by “labor legislation and other regulatory legal acts containing labor law norms.” Commercial organizations in the manner “established by the collective agreement, agreements, local regulations.”

Mainly large companies that have acceded to industry agreements in which this obligation is fixed can boast of having a clause on annual wage indexation in the collective agreement. Such a norm is, for example, in the Federal Industry Agreement on Communications and Information Technologies Organizations of the Russian Federation for 2012-2014, approved on December 23, 2011 by the Ministry of Telecom and Mass Communications of the Russian Federation No. ISH-P14-21421.

Small organizations do not always have a collective agreement. And where it exists, as a rule, there is not a word about wage indexation. In those rare cases when they do not forget to mention indexation, they add a note: “If the employer has financial capabilities.” However, Rostrud specialists insist that if the procedure for indexing wages is not spelled out in the organization’s documents, then appropriate changes must be made to them (Rostrud letter No. 1073-6-1 dated April 19, 2010).

How wages are indexed in 2016

Let's figure out who is entitled to wage indexation in 2016, how often and in what order it should be carried out.

An increase in salaries (tariff rates) leads to an increase in labor costs and a reduction in the tax base for income tax. These facts may be of interest to both representatives of the tax office and the owners of the enterprise. To avoid problems when preparing documents for indexation, you should make reference to the norms of articles and the Labor Code, as well as stock up on statistical data on inflation, for example, for the previous year, price increases in the region, changes in the cost of the consumer basket, etc.

Based on Article 134 of the Labor Code of the Russian Federation, wage indexation must be carried out in all organizations without exception.

Its obligatory nature is beyond doubt. Although unscrupulous managers ignore this legislative norm and do not increase people’s wages for several years in a row.

Inconsistent indexing

Salary indexation is the responsibility of companies by law, but there is still no uniform regulation for its implementation.

The ambiguity of the issue gives rise to many disputes leading to conflict situations between employee and employer, employer and regulatory authorities.

Due to the lack of a unified regulation for its implementation, the indexing mechanism is unclear:

• What exactly should be indexed: the constant component of the salary or the variable part too?
• What should be the frequency of indexing?
• What indicators should be taken to calculate the indexation coefficient?
• How to legally formalize such an increase in earnings?

Only one thing is clear, that indexation must be carried out mandatory for all employees of the organization without exception.

Differences between salary increases and salary indexation

Many employers mistakenly believe that if they annually increase salaries at the enterprise, then there is no need to index wages.

The fact is that increasing salaries and indexing earnings are two different things. After all, the salary can be increased for one or all employees. Some will receive an increase of 10% of their salary, while others will receive a 50% increase. When the salary is increased, an order is issued, a new staffing table is approved, and additional agreements to employment contracts are signed. The purpose of increasing the salary is to interest a specific employee in further cooperation.

The purpose of wage indexation is to bring workers’ earnings into line with current consumer prices and thereby, at a minimum, maintain their quality of life at the same level.

Wage indexation, in contrast to salary increases, is carried out at the same time for all employees by the same factor.

Due to the lack of a unified procedure, we recommend that in order to comply with labor legislation, all organizations adopt an internal document regulating the procedure for indexing wages. This will protect companies from trouble in the event of an audit of compliance with labor law standards and will allow performers to have a clear understanding of its procedure.

Points that a local regulatory act on indexing should contain:

1. Frequency of salary indexation: monthly, quarterly, every six months, annually. It is not advisable to carry out indexation once a month or quarter, since this is a very labor-intensive process, especially in enterprises with a large staff. It is important that indexation is carried out at least once a year, for example, annually from January 1.

1. Indexation level. Due to the uncertainty of the issue, it is permissible to link this coefficient:

• to the consumer qualification index for a specific period in the region where the company is located or in Russia as a whole;
• to the officially recognized federal or regional inflation level;
• to increase the national or regional subsistence level for the working population;
• to an increase in the minimum wage in the whole country or region.

If none of these indicators are satisfactory, then there is no indication anywhere that it is impossible to establish a specific coefficient by which wages will be regularly indexed.

It is important that a document regulating the indexation of earnings be developed and approved and its requirements be fulfilled unquestioningly.

What components of earnings need to be indexed?

To carry out mandatory indexation of wages, it is enough to index its constant part - salary, tariff rate, piece rate. In most companies, all other parts of earnings - allowances, bonuses, as a rule, are tied as a percentage to the constant component. Therefore, their increase will naturally lead to an increase in everything else.

But you need to take into account that if at an enterprise, allowances and bonuses are fixed in labor, collective agreements or in the Regulations on remuneration in a specific figure, then their indexation in this case will not entail the indexation of allowances and bonuses. And then the indexation of earnings will be partial. Therefore, it cannot be assumed that due to rising consumer prices, workers did not lose wages.

Therefore, in organizations in which the payment of allowances and bonuses is made in fixed amounts, it is advisable to include them in the local regulatory document on earnings indexation in order to carry out full indexation.

Dependence of wages on the selected indexation coefficient

When choosing a coefficient on the basis of which the organization will periodically adjust employee salaries, it is necessary to first calculate what workers will be able to receive for their work in the end.

Example #1. Options for calculating salary indexation

Let's consider how an employee's earnings will change in 2016 at Alpha LLC compared to 2015, provided he meets all planned targets and does not violate the work schedule. For clarity, we summarize the calculation results in the table below.

In 2015, Ivanov received a salary of 30,000 rubles. Every month he receives a bonus of 15% for fulfilling the plan and 5% for the absence of violations of labor regulations.

Let's calculate the salary for various salary indexation coefficients (options 1-3).

Salary recalculation takes place annually on January 1, his salary is indexed to the level: (click to expand)

• Option 1: Minimum wage set for the new year compared to last year.
• Option 2: at the officially planned inflation rate for the next year
• Option 3: by the earnings indexation coefficient established in the organization -1.05.

Ivanov’s earnings in 2015, taking into account allowances, will amount to 36,000 rubles.

Calculation according to Option No. 1

The minimum wage in the Russian Federation in 2015 was 5,965 rubles. For 2016 it is set at 6204 rubles.

Therefore, the coefficient of increase in earnings depending on the increase in the minimum wage will be:

6204 / 5965 = 1,04

Ivanov’s earnings in 2016 under option 1 will increase by 4%:

36000 x 1.04 = 37440 rubles

Calculation according to Option No. 2

For 2016, the authorities have set an inflation rate of 6.4%. Earnings will also increase by this percentage:

36000 x 1.064 = 38304 rubles

Calculation according to Option No. 3

In 2016, earnings according to the 3rd option will be:

36000 x 1.05 = 37800 rubles

	Earnings in 2015, in rubles		Amount of real increase in wages, rubles
Option 1	36000	37440	1440
Option 2	36000	38304	2834
Option 3	36000	37800	1800

The example clearly shows that the level of wage indexation directly depends on the chosen indexation indicator.

Dependence of the amount of wages on the chosen indexation coefficient and the adopted method of material incentives for workers

Employee incentives can be made either as a percentage of salary, tariff rate or piece rate, or be a constant value.

Example #2. Calculation of salary indexation with bonuses and allowances

Let's consider a situation where Ivanov is not given monthly bonuses as a percentage of his salary, but is paid a fixed bonus of 6,000 rubles for the same indicators. And we will accept that only salaries are indexed at the enterprise. We will leave all other data unchanged.

The result of the event is shown in the table below. (click to expand)

Option	Earnings 2016, in rubles	Amount of real increase in wages, rubles
Option 1	37200	1200
Option 2	37920	1920
Option 3	37500	1500

From this example it is obvious that with this method of bonuses and indexation of only salaries, workers seriously lose in earnings.

Choosing an indexation coefficient as a way to protect workers' rights

We looked at only 2 examples. In fact, there are many options. The conclusion suggests itself. The level of indexation depends on the specific parameters prescribed in the Regulations on remuneration and material incentives, and in the regulatory act on indexation of earnings.

The team of any enterprise has the opportunity to influence the level of indexation through the remuneration system and its indexation indicator.

The employer can direct its responsibility in the direction it needs to go, increasing the interest of employees and reducing staff turnover.