Each employee of any organization wants to receive a good, optimal salary, which will correspond to his status and material needs. Moreover, any person should understand what indexation of salaries is when it is carried out, and also how it differs from the usual increase in earnings. In government organizations, the procedure is mandatory, but in commercial companies it is the employer who decides whether this process is necessary.
What is salary indexation?
The procedure is represented by increasing the salary of employees, which takes into account the level of inflation and changes in prices for various consumer goods or any services. A process is being implemented to ensure that employees of various organizations maintain their purchasing power.
The process can be implemented using different methods. If the price level for previous periods is taken into account, then such indexation is called retrospective. The expected indexation focuses on how prices for various goods will increase in the future.
Why is it done?
Employers and employees of different companies should know not only what salary indexation is, but also for what purposes it is carried out. The process should be economically viable. The main goal of the procedure is to preserve the purchasing power of all employees of enterprises.
The leaders of different companies should constantly monitor changes in the level of inflation in order to increase the salaries of their hired specialists if necessary.
Process Types
Salary indexation in organizations can be different:
- Negotiated. This procedure is independent of changes in consumer prices or inflation. For its implementation, an appropriate decision is made by state bodies. It is transferred to lower authorities, as a result of which a salary of employees increases by a certain percentage. This type of indexation is often used in European countries.
- Planned In another way, the procedure is called automatic, since its implementation does not require any decisions or meetings. The indexation is being fixed at the legislative level by issuing a special normative act. At a certain point in time, all employers must increase the salary of their employees by a specific coefficient.
- Expected or retrospective. In determining these types of indexation, prices of goods or services for past periods or projected indicators are taken into account.
In Russia, the leaders of various budget organizations use planned indexing. This process is their responsibility. In commercial enterprises, management independently decides whether there will be an indexation of salaries, since the most common in such organizations is the standard increase in earnings.
Legislative regulation
In Art. 134 TC establishes the obligation of employers to index their employees' salaries. The indexation of salaries to state employees is implemented on the basis of federal or regional regulations.
In commercial organizations, the provisions of their own documents are taken into account. These documents include the following:
- collective agreement governing the cooperation of the enterprise with all employees;
- local regulations, fixed on the basis of the order of the head of the enterprise;
- individual contracts drawn up with each employee of the company;
- statutory documentation;
- different Provisions developed by the employer.
Commercial firms are not required by law to index their employees' salaries, but managers often indicate the need for this process in their regulatory documents. In this case, the indexation of salaries in commercial organizations becomes mandatory. Typically, such Regulations are introduced only in large firms in which there is a collective labor contract, the clauses of which apply to all employees.
Who is being implemented?
The indexation of salaries to state employees is carried out annually by the leadership of these government agencies.
In commercial companies, it is the manager who decides on the need to implement this process. It does not take into account what is the organizational form of the organization. Even a private entrepreneur, recruiting hired employees, can engage in indexing.
Who is it for?
All employees of private or state-owned companies should know what salary indexation is and who it is for. In budgetary institutions, the procedure is implemented for absolutely all employees.
In commercial firms, indexation is carried out for all persons working in the organization on the basis of a standard labor contract. But the manager can choose for this only some employees who have any merits or awards.
Reasons for
The indexation of civil servants' salaries is realized annually without taking into account various external factors. Therefore, for this process does not require the presence of any good reason.
If the decision to increase the wages of workers is made in a private company, then usually it is due to good reason. This is usually due to the following points:
- an increase in the income level of a direct company that becomes a market leader or makes high profits; therefore, to increase the motivation of employees, as well as to encourage experienced professionals, their salaries are indexed taking into account price increases and inflation;
- indexation can be carried out individually for any employee who has distinguished himself at work, so the increase in his earnings is associated with high results;
- the process is required to retain experienced specialists in the company who are perfectly able to cope with their labor duties, but at the same time they expect to receive a salary corresponding to rising prices and inflation.
In private organizations, the indexation procedure is implemented only after the publication of the relevant order by the head of the enterprise.
When not applicable?
Salary indexation in Gazprom or another state institution is carried out only for employees with whom a standard labor contract has been concluded.
There is no process for employees working on the basis of civil law agreements. This is due to the fact that such hired specialists are not subject to the requirements of labor legislation, therefore they cannot require their employers to comply with the provisions of Art. 134 shopping mall.
Frequency
The frequency of indexation is set based on the content of regulations or a collective agreement. Every employee must have access to this information. All information should be transmitted in a form understandable to each person.
Indexation is implemented when the consumer price index exceeds 101%. In this case, the process is carried out from the beginning of the next month. Goskomstat is involved in the calculations, providing information before the 10th day of each month.
Many companies conduct indexation of salaries per year only once.
Features for budget institutions
The indexation of the salaries of the military as well as civil servants is regulated by the provisions of federal and regional legislation. Last year, it was held from the beginning of 2018, and also amounted to 4%.
The process is carried out annually, for which the level of inflation is taken into account.
Rules for Businesses
The head of a private company independently determines how often indexation will be carried out, and also by what coefficient the salary of employees will increase. He can focus on the position of the TC, but this is not his responsibility.
Some employers refuse to carry out indexing, so they simply periodically increase the salaries of their employees by a certain amount of money. If the director decides to use periodic indexing, then information about the implementation of the process will certainly be fixed in the regulations of the company. In this case, the employer must perform the procedure, otherwise he will be held accountable.
If employees find that the head of the company violates their rights and therefore does not increase their salaries on the basis of rising inflation and consumer prices, they can file a complaint with the labor inspectorate, prosecutor's office or court.
Employer Responsibility
All heads of budget organizations are required to carry out indexation. The owners of commercial enterprises also have an obligation, if the need to increase earnings is enshrined in regulatory enactments.
If the management of an enterprise violates the rights and interests of its employees by refusing to increase their earnings, then citizens can receive support from the labor inspectorate. If, on the basis of the inspection, violations are really revealed, the head of the company is held liable. Individual entrepreneurs and officials pay a fine of 1 to 5 thousand rubles. Legal entities pay a fine of 30 to 50 thousand rubles.
Additionally, after identifying such a serious violation, the company will have to face an increase in periodic inspections.
How is it done?
The salary indexation for military personnel or other citizens is implemented in the standard sequence of actions:
- if the procedure is carried out in a private company, then the rules for its implementation are fixed in the regulatory documentation;
- all employees get acquainted with this document;
- in a specified period of time, the director issues an order based on which the salary of employees increases;
- all hired specialists should be familiarized with this order;
- changes are made to the staffing table;
- to labor agreements, employees are supplemented by additional agreements that indicate an increased amount of earnings.
In budgetary institutions, when raising the salaries of specialists, managers take into account the coefficient established at the state level. Owners of private companies independently calculate this ratio.
Recommendations to private employers
Since the legislation lacks clear information on how to index owners of private companies, this often leads to the fact that heads of organizations simply refuse to implement this process. If the employer decides to conduct the process, then he takes into account the following recommendations:
- information about such a procedure is certainly enshrined in a collective agreement;
- a special Regulation is published containing information on when indexation is carried out, how it is calculated, as well as other features of the process;
- the most commonly implemented procedures are at the beginning of each calendar year.
Heads of government agencies conduct indexation based on legal requirements.
Conclusion
Indexation - an increase in the salary of each person based on rising inflation or prices for various consumer products. It is mandatory only for budgetary institutions. Heads of private enterprises may refuse to implement it.
If a private company is engaged in indexing the salaries of its employees, then information on the conduct of this process should be fixed in the internal regulatory documentation.