Is the employer obliged to increase wages to employees taking into account inflation and rising prices? The law provides for fairly strict standards in this regard.
Dear readers! The article talks about typical ways to resolve legal issues, but each case is individual. If you want to know how solve exactly your problem- contact a consultant:
APPLICATIONS AND CALLS ARE ACCEPTED 24/7 and 7 days a week.
It's fast and FOR FREE!
What is the procedure for salary indexation in 2019? Organizations must periodically increase salaries. In this case, the rules established by law must be observed.
How is indexation carried out periodically or annually in 2019? Does the law establish a certain procedure or only recommend an increase in salaries?
General points
If they ignore indexation, employers may face unpleasant consequences if their activities are audited by the labor inspectorate.
Inspection bodies can:
- Oblige the approval of the procedure for indexing wages by internal standards.
- Impose a fine on .
It should be noted that the practice of collecting fines is ambiguous. In particular, an employer who does not agree with the fine can challenge the decision of the labor inspectorate in court and the chances of winning against him are very high.
But if the organization has an approved regulation on indexation, but it is not implemented, then you will most likely have to pay a fine during the audit.
What is it
Salary indexation is an increase in wages taking into account the inflation rate. This method acts as a way of social protection of workers against the backdrop of an increase in the cost of living.
Commercial structures have the right to approve the indexing procedure at the local level, but they can also ignore this rule.
A fine is imposed only in case of failure to comply with the approved provisions. It turns out that the decision on indexation remains at the discretion of the employer.
You can include in local regulations a condition that indexation be carried out once every ten years. Or it could be worded something like this:
“...indexation of employee salaries will be carried out subject to the availability of additional funds...”
That is, theoretically, the employer does not refuse indexation, but in practice it may not exist.
Legal regulation
Salary indexation is discussed in Article 134 of the Labor Code of the Russian Federation. As for the composition of indexation, the Labor Code of the Russian Federation speaks about it.
The salary takes into account not only salary or tariff accruals, but also bonuses, compensation for additional work or harmful working conditions and other incentive payments.
The organization can be fined 50,000 rubles, and the manager – 5,000 rubles. But only in the case where there is an approved local rule on wage indexation.
Otherwise, the labor inspectorate is only authorized to issue a warning about the need to approve the indexation procedure.
Procedure
It is permissible to prescribe the procedure for indexing with employees.
But the employment contract must necessarily indicate the salary amount, and the terms of the agreement can be changed only with the consent of the employee.
That is, you will need to issue an order to change the salary (tariff, piecework payment). Then you need to register.
This procedure provides. In addition, the manager will need to issue an order to make changes to.
Moreover, a new edition of the schedule can be approved. Since the indexation procedure is approved in a local act, the manager’s orders must contain a reference to this standard.
This way the Regulations on wage indexation 2019 can be approved, a sample can be found. In practice, specifying the indexation procedure in employment contracts is quite inconvenient.
It is necessary to discuss indexing with each employee separately. Therefore, the following order is usually used:
- A local act is drawn up, which stipulates all indexation conditions.
- All employees familiarize themselves with the accepted document against signature.
- An order for indexation is issued.
- The staffing table is approved indicating the already changed salaries.
- Each employee is signed.
Frequency of accrual
The employer can index the salary monthly, annually or every few years. But you need to take into account some features.
Thus, monthly indexation is difficult to implement, since it is very problematic to prepare all the necessary documents in a short time.
Raising wages once in a few years is also risky. If checked by the labor inspectorate, such a situation may be considered a violation of workers’ rights and local regulations will need to be approved.
By the way, if an organization carries out indexation but has not approved its procedure, this is also considered a violation and is fraught with a fine.
It is advisable to carry out indexation annually, having previously approved its procedure in internal documents.
Conditions
When establishing the indexation procedure in internal regulations, the following rules must be specified:
- frequency of the procedure;
- list of indexed payments;
- rules for determining the indexation coefficient.
When determining the coefficient for changing wages, the employer has the right to independently decide which indicator he will be guided by when increasing wages - the Rosstat index, the percentage of inflation or the ratio of the current and last year.
In any case, the chosen coefficient or the method for calculating it must be enshrined in a collective agreement, order of the manager or other local act.
In this case, the employer can determine what payment will be increased - only the salary or all payments without exception.
In commercial organizations
From all of the above, it turns out that commercial organizations are more free to determine the order of indexing.
They can independently choose the most acceptable options and approve the appropriate procedure for increasing salaries.
For this reason, it may seem that for commercial enterprises, salary indexation is a recommended procedure. Actually this is not true.
The judges noted that wages should be increased not only for public sector employees, but also for employees of commercial structures.
Video: salary indexation
It turns out that managers of commercial enterprises are obliged to take care of indexing. At the same time, at the request of management, they can be increased by a larger percentage than the officially established figure.In budgetary institutions
Indexation in budgetary organizations is carried out at the state level. The period for suspending wage indexation for public sector employees expires on January 1, 2018.
In accordance with the May decrees, from May 1, 2019, indexation is provided for at least 4.1%. The next indexation is expected in the next two years.
There is no indexation procedure in the legislation, so the question often arises of how often and by what amount payments need to be indexed. Commercial organizations and entrepreneurs themselves determine the frequency, procedure for determining the amount of indexation and the list of indexed payments. For example, annually as the minimum wage increases, monthly as the consumer price growth index is published, etc.
But the essence of indexation is to offset the real decrease in wages, which is caused by rising consumer prices for goods and services in the region, so indexation must correspond to its purpose. This was confirmed to us by the Ministry of Labor. Rostrud recommends focusing on the growth rate of consumer prices for goods and services, which is officially published annually, and indexing wages every year. If the procedure does not provide for indexation every year, this in itself is not initially a violation. But the employer must have a logic why he does not index wages annually.
Increasing wages at the rate of inflation is not the only way to ensure wage growth. The consumer price growth index is also not the maximum limit. There are several ways to increase your salary. For example, to proportionally increase all those payments that are included in the wage system, or individual payments. In particular, raise the salary.
Please also note that the salary of all employees who work full time cannot be less - 11,280 rubles. per month. If the minimum wage is higher in the region, focus on it.
Note: Letter of the Ministry of Labor dated December 24, 2018 No. 14-1/OOG-10305
Is Salary Indexation Mandatory in the Commercial Sphere?
Raising wages is one of the main government guarantees. Therefore, indexation of employee salaries is an obligation, not a right of the employer. This follows from the Labor Code of the Russian Federation.
The indexation procedure for those who do not receive budget funding for salary payments is not established by law. Therefore, the employer must enshrine it in its local documents (for example, a collective agreement, Regulations on remuneration). If the indexing procedure is not established in the current local regulatory documents, make appropriate amendments to them.
Note: Letter of Rostrud dated April 19, 2010 No. 1073-6-1, rulings of the Constitutional Court of the Russian Federation dated November 19, 2015 No. 2618-O and July 17, 2014 No. 1707-O.
If you do not index your salary and do not have a procedure for indexing it, administrative fines are possible. This is discussed in the letter of the Ministry of Labor dated December 26, 2017 No. 14-3/B-1135.
The Supreme Court has a different opinion on this matter: it is possible to maintain the level of real wages not only through indexation. For example, an employer can increase the salary of employees or pay a one-time bonus (clause 10 of the Review of Judicial Practice No. 4 (2017), approved by the Presidium of the Supreme Court on November 15, 2017).
to menu
What does the Constitutional Court think about wage indexation?
The ambiguity of the norms of the Labor Code of the Russian Federation regarding the obligation of employers not related to the public sector to index salaries was also the subject of consideration in the Constitutional Court of the Russian Federation. And he did not consider these provisions to be uncertain.
The Constitutional Court of the Russian Federation indicated that indexation should be provided to all employees. At the same time, employers - non-budgetary organizations are given the right to independently determine the procedure for its implementation. This allows them to take into account the entire set of circumstances that are significant for both employees and employers. That is, on the one hand, the Labor Code of the Russian Federation protects employers from unbearable burdens, and on the other hand, it does not allow them to deprive employees of the guarantee provided by law and evade establishing compensation. This achieves a balance between the interests of private sector workers and employers.
to menu
What controllers say about salary indexation
Rostrud, like the Constitutional Court, concludes that the Labor Code of the Russian Federation obliges all employers to carry out salary indexation. But since there is no specific procedure for carrying it out for employers in the extra-budgetary sector, the Labor Code allows such employers to establish this procedure at their own discretion. And if the employer’s LNA does not have corresponding provisions on indexation, then he must either develop a special document or make the necessary additions to the already existing LNA (for example, to the regulations on wages).
Therefore, when state labor inspectors, during an inspection, discover that the employer does not carry out indexation and does not have an LNA with the relevant provisions, then, as a rule, they issue an order to the employer to eliminate the violation (the obligation to accept the LNA or supplement the existing one). In addition, they can bring the organization and its leader to administrative liability under (and if the violation is committed repeatedly, under Part 4 of Article 5.27 of the Code of Administrative Offenses of the Russian Federation). Courts often agree that both injunctions and prosecution are legal.
SHKLOVETS IVAN IVANOVICH- Deputy Head of the Federal Service for Labor and Employment"Taking into account the fact that indexation must be carried out in accordance with the procedure provided for by one of the documents specified in , the absence of such a document from the employer is, as a rule, regarded as a violation of the requirements of the Labor Code of the Russian Federation and entails the issuance of a mandatory order to eliminate the violation and the involvement of the employer in responsibility. Judicial practice on such issues is contradictory. When analyzing it, it should be taken into account that the subject of judicial consideration may be various issues and specific situations, and the Federal Labor Inspectorate in its supervisory activities takes into account, first of all, the results of the generalization of judicial practice by the Supreme Court of the Russian Federation. not at the moment."
to menu
What conclusions do courts of general jurisdiction reach on the issue of wage indexation?
Judicial practice on issues of recovery of indexation amounts and the employer’s obligation to accept LNA for indexation is currently ambiguous.
The amount of the stipulated indexation is usually collected
If the employer’s obligation to index wages is provided for by the necessary documents, but indexation was not carried out, then the courts often satisfy claims for the recovery of underpaid amounts.
WE WARN THE MANAGER
If the employee wins the case in court to recover the indexation amount, the employer will be obliged to pay him this amount with interest.
By the way, some employers set a small percentage of indexation, which turns out to be lower than what is generally required under the Labor Code of the Russian Federation (based on the consumer price index). And it happens that employees manage to recover the difference in such cases. For example, there were several court cases where the employer set an indexation rate of only 2% and the court found that this amount did not ensure an increase in the level of real salary content.
But there are also decisions in which the courts attached paramount importance to the indexation conditions provided by the employer. For example, the employer made the fact of indexation dependent on the economic indicators of its activities, that is, on the availability of financial opportunity. Or payment of indexation required a joint decision with the trade union. If these conditions were not met, then the indexation amounts were not collected.
to menu
The amount of unforeseen indexation is rarely collected
If the employer’s obligation to index wages is not recorded in the relevant documents, then the courts generally do not recover the amounts underpaid due to failure to index the wages. At the same time, among the additional arguments for refusing the claim are, in particular, the following:
- employees' wages were raised; accordingly, the employer took measures to ensure an increase in the level of real wages. That is, indexation is not the only way to ensure salary growth and the employer has the right to choose a different method (for example, a regular increase in salaries, bonuses, other incentive payments);
- indexation is the right of the employer, therefore the court has no right to interfere in this area of its activities;
- the employee’s salary is quite decent (in one case it was more than 200 thousand rubles) or at least .
Only in isolated cases, when the indexation procedure was not established, did the courts believe that the Labor Code of the Russian Federation obliges all employers to carry out indexation, and therefore recovered underpaid wages based on the consumer price index. And it didn’t even matter that the employer increased workers’ wages. Because a salary increase is not equivalent to its indexation.
to menu
It is difficult to oblige an employer to approve the indexation procedure
Sometimes employees (or a trade union or prosecutor on their behalf) go to court with a demand not for the recovery of money lost due to failure to index, but for the employer’s obligation to approve the indexation procedure - to accept the LNA or to include the corresponding provisions in the labor or collective agreement. In such cases, the courts' opinions also differed.
Most courts refuse to satisfy such claims, citing the following reasons:
- questions about the size, method and frequency of indexation affect the interests of all employees and relate to collective disputes that are resolved in a special manner provided for by the Labor Code of the Russian Federation - by a conciliation commission, with the participation of a mediator or in labor arbitration. Therefore, neither the courts nor state labor inspectors are competent to resolve such labor disputes;
- The Labor Code of the Russian Federation does not provide for such a method of protecting the labor rights of employees as the obligation of the employer to issue LNA;
- The legislator left the question of determining the indexation procedure to employers. And if the employer has not accepted the corresponding LNA, then the court cannot oblige him to do so. But the labor inspectorate, as some courts have found, can.
But there are still court decisions that oblige employers to adopt the LNA, which regulates the indexation procedure. Since, according to the judges, indexation is mandatory for all employers and there should be such a LNA.
to menu
Please note that the employee has only 3 months to go to court from the day he learned or should have learned about a violation of his rights. The employee learns about the non-receipt of the amount due due to indexation every month on the day the salary is issued. Therefore, if the courts satisfy the claims of employees to recover the indexation amount, then only for those months of their work that fall within the 3-month statute of limitations. If this period has expired, they refuse to consider the claim, without recognizing the employer’s violation of non-payment of indexation as continuing. Moreover, if an employee missed the statute of limitations due to contacting the labor inspectorate, then the courts do not recognize such a reason for missing a valid reason and indicate that nothing prevents the employee from immediately contacting both authorities. But if the employee did not know in what order the indexation should be carried out, since he was not familiar with the collective agreement or the relevant LNA, then the court may agree that the statute of limitations has not expired.
By the way, some offended workers who have not received the indexed salary take a different path. They go to court with a claim to declare the employer’s inaction in not accruing indexation amounts unlawful and to recover compensation for moral damage. Sometimes they manage to achieve a decision in their favor. But even in this case, the limitation period is 3 months.
to menu
Employers are obliged to carry out indexation only if the procedure for its implementation is established in a collective agreement, agreement, or local regulatory act.
It is the employer’s right, not an obligation, to initiate the signing of a collective agreement, agreement, or local regulatory act establishing the indexation procedure.
Accordingly, for failure to comply with the norm, the employer may be held liable under Art. 5.27 of the Code of Administrative Offenses of the Russian Federation on one basis: for failure to perform indexation, if the obligation and procedure for its implementation are enshrined in a collective agreement, agreement, or local regulatory act. If there is no indexation procedure in a collective agreement, agreement, or local regulatory act (i.e., the employer has not accepted the obligation to index wages), then it is impossible to punish him for failure to assume such an obligation, since the definition of the indexation order and the act in which it is enshrined , - the right of the employer.
The most correct is the first interpretation of the norm, since the legislator quite clearly indicates the employer’s obligation to index wages, while giving him the rights:
- independently determine the order of indexing (frequency, size, etc.);
- select an act that sets out the indexation procedure from the list proposed by the legislator (collective agreement, agreement, local regulation).
Is it necessary to index if there is no collective agreement?
The question arises: is it necessary to index wages if the employer does not have a collective agreement or a corresponding local act? The Ministry of Labor believes that in this case too, the employer is obliged to carry out indexation.
Note: Report of the Ministry of Labor published at the end of 2017
“If, based on the results of the calendar year during which Rosstat recorded an increase in consumer prices, wage indexation was not carried out, the employer is subject to liability established by law, regardless of whether it adopted the corresponding local act or not. At the same time, supervisory or judicial authorities are obliged to force him to eliminate the violation of labor legislation, both in terms of indexation and in terms of adopting a local act, if there is none.”
to menu
Order on salary indexation
Will be needed when indexing salaries. The procedure for indexation should be additionally specified, for example, in the Regulations on Remuneration. In the future, salary indexation will be carried out on the basis of the manager’s order with reference to the relevant local regulation.
Document each case of salary indexation in an organization with an order. The form of the document is arbitrary. Employers determine the procedure for indexing wages independently in their local documents.
Limited Liability Company "GASPROM"
(GASPROM LLC)ORDER No. 3
on salary indexationMoscow 01/15/2016
In accordance with the provisions of the Labor Code of the Russian Federation and section 6 of the Regulations on remuneration of Gazprom LLC, I ORDER:1. Increase the salary of all employees of Gazprom LLC in the first quarter of 2016 in accordance with the consumer price growth index. For calculation, use equal to 106.2.
2. Chief accountant A.S. Petrova to ensure that salaries are calculated taking into account indexation starting in January 2016.
General Director _________ A.V. Ivanov
I have read the order:
Chief accountant ________ A.S. Petrova
to menu
Clause 2 of the motivational part of the Constitutional Court’s Determination of June 17, 2010 N 913-О-О
clause 2 of the motivational part of the Constitutional Court’s Determination dated July 17, 2014 N 1707-O
Letter of Rostrud dated April 19, 2010 N 1073-6-1
clause 15 of the Resolution of the Plenum of the Supreme Court of March 24, 2005 N 5
Determination of the St. Petersburg City Court dated September 23, 2013 N 33-14123/13
Resolutions of the Kemerovo Regional Court dated December 12, 2014 N 4A-924-14; Leningrad Regional Court dated 07/02/2014 N 4a-477/2014; Moscow City Court dated July 23, 2012 N 4a-1319/12
Appeal rulings of the Supreme Court of the Republic of Karelia dated November 14, 2014 N 33-4310/2014; Moscow City Court dated October 8, 2013 N 11-33530, dated September 10, 2013 N 11-25767/2013
Determination of the Krasnoyarsk Regional Court dated 08/07/2014 N 4g-1541/2014; Appeal ruling of the Krasnoyarsk Regional Court dated May 21, 2014 N 33-4227/2014, B-10
Appeal rulings of the Moscow City Court dated June 16, 2015 N 33-17046, dated November 10, 2014 N 33-25030/2014; Khabarovsk Regional Court dated July 25, 2014 N 33-4444/2014
Appeal ruling of the Moscow City Court dated 02/06/2012 N 33-3216
Determinations of the Leningrad Regional Court dated 08/14/2013 N 33-3708/2013, dated 08/14/2013 N 33-3707/2013, dated 01/23/2013 N 33-217/2013; Sverdlovsk Regional Court dated May 10, 2012 N 33-5756/2012
Appeal rulings of the Murmansk Regional Court dated August 20, 2014 N 33-2356-2014; Krasnoyarsk Regional Court dated April 24, 2013 N 33-3792; Moscow City Court dated October 24, 2012 N 11-23900/12, dated October 16, 2012 N 11-16829
Determinations of the St. Petersburg City Court dated January 30, 2014 N 2-838/14; Leningrad Regional Court dated September 18, 2013 N 33-4335/2013; Appeal rulings of the Moscow City Court dated December 12, 2013 No. 11-36261/13, dated September 4, 2013 No. 11-22646/13, dated July 18, 2013 No. 11-22647/13; Supreme Court of the Republic of Tatarstan dated June 13, 2013 N 33-6870/13
Appeal ruling of the Moscow City Court dated December 24, 2013 N 11-42489
Appeal ruling of the Khabarovsk Regional Court dated December 20, 2013 N 33-8098/2013
Determination of the Krasnodar Regional Court dated August 11, 2014 N 4g-8161/2014
Determination of the Sverdlovsk Regional Court dated February 14, 2012 N 33-1806/2012
Determination of the Supreme Court dated January 25, 2013 N 44-KG12-5; Appeal rulings of the Khabarovsk Regional Court dated January 23, 2015 N 33-425/2015; Sverdlovsk Regional Court dated 06/04/2014 N 33-6511/2014
Appeal ruling of the Trans-Baikal Regional Court N 33-2692-2013
Appeal rulings of the Khabarovsk Regional Court dated January 23, 2015 N 33-421/2015; dated January 30, 2015 N 33-419/2015; Moscow City Court dated 06/04/2013 N 11-15278; Supreme Court of the Komi Republic dated October 29, 2012 N 33-4838AP/2012; Rostov Regional Court dated September 27, 2012 N 33-11280
Appeal ruling of the Voronezh Regional Court dated December 16, 2014 N 33-6576; Cassation ruling of the Supreme Court of the Altai Republic dated 02/08/2012 N 33-108
Determination of the Leningrad Regional Court dated May 15, 2013 N 33-1971/2013; Appeal rulings of the Murmansk Regional Court dated September 10, 2014 N 33-2623-2014; Volgograd Regional Court dated 07/05/2012 N 33-6662/12, dated 07/19/2012 N 33-6936/2012
Determination of the Moscow City Court dated April 23, 2015 N 4g/6-3468/15, 2-5509/2013; Appeal rulings of the Perm Regional Court dated 06/02/2014 N 33-4824; Ryazan Regional Court dated July 23, 2014 N 33-1405
Appeal ruling of the Volgograd Regional Court dated July 26, 2013 N 33-8040/13
How much will public sector salaries increase? What is the expected increase in wages for doctors, teachers, and various officials in 2019 - 2020?Indexation of vacation pay when salaries increase - is this a necessary attribute for changes in wages or not? This question may concern not only employers, but also the employees themselves. Our material will help you understand the intricacies of salary increases, as well as the indexation of salary-related payments.
What about salary increases?
Increasing wages is a common procedure carried out by employers. Moreover, such an increase can be achieved using different methods:
- by indexing;
- salary increase.
Despite the fact that these methods are similar in their results, their nature is different in essence. Indexation is a guarantee provided at the state level (Articles 130, 134 of the Labor Code of the Russian Federation). The salary increase is voluntary.
The differences between these procedures are discussed in more detail below:
Salary increases in the form of indexation should be applied by all employers. Moreover, one of the conditions for using such an increase is the presence of a mention of this in the collective agreement or other local regulatory act of the enterprise (definition of the Constitutional Court of the Russian Federation dated November 19, 2015 No. 2618-O, letter of Rostrud dated April 19, 2010 No. 1073-6-1). In addition, it is within the competence of each employer to independently establish indexation rules, as well as determine the indexation coefficient itself.
The indexation coefficient (CI) is determined in the following way:
CI = Salary after indexation / Salary before indexation.
PLEASE NOTE! Since indexation is a government measure to bring the income received by citizens into line with the level of current market prices, the value of the CI provided by the employer is recommended to be correlated with the inflation rate for a specific region or country (determination of the St. Petersburg City Court dated March 21, 2011 No. 3866).
At the same time, it is also necessary to adjust the average earnings (AS). Note that the SZ should be adjusted if the wages themselves (salaries and tariff rates) change. If the amount of other payments, for example compensation or incentives, has increased, this does not entail the need to adjust the SZ (clause 16 of the Regulations on the specifics of the procedure for calculating average wages, approved by Decree of the Government of the Russian Federation of December 24, 2007 No. 922, hereinafter referred to as the Regulations).
What is the procedure for wage indexation?
All changes in working conditions must be fixed in the employee’s employment contract. In this connection, when indexing earnings, the employer should certainly enter into an additional agreement with the employee to the employment contract indicating the updated amount of remuneration. In this case, it is important to make reference to the provision of the local act, in accordance with which the change in wages occurred (Article 134 of the Labor Code of the Russian Federation).
How to correctly index wages, see.
Is it necessary to index vacation pay?
Due to the fact that the calculation of vacation pay depends on the size of the SZ, the indexation carried out in the organization affects the amount of vacation pay.
SZ for the purposes of the Labor Code of the Russian Federation is determined in accordance with Art. 139 Labor Code and Regulations.
According to clause 16 of the Regulations, an increase in the employee’s SZ is carried out with an increase in tariff rates, salaries (official salaries), and monetary remuneration in the organization (branch, structural unit). From the provisions of this norm it follows that the indexation of SZ is carried out if the increase affected all employees of the company. If such an increase is not carried out in relation to at least one employee, then the SZ is not indexed. The rationale for this conclusion can be found in letters from the Ministry of Health and Social Development of Russia dated January 30, 2009 No. 22-2-176 and Rostrud dated October 31, 2008 No. 5920-TZ. Thus, the indexation of vacation pay is influenced by the fact whether the SZ was increased or not.
How is vacation pay indexed?
The indexation of vacation pay depends on the following factors:
- If the salary increase occurred during the period that is used to calculate vacation pay, then the SZ must be adjusted to the CI for the entire billing period.
- If the increase occurred during a period that is not included in the calculation of vacation pay, but precedes the vacation, then the SZ must be indexed for the calculation period.
- In cases where the salary increase occurred on vacation days, the SZ is adjusted from the date of the salary increase.
To index vacation pay, you must use the CI calculated using the above formula.
Note that the calculation period for determining the SZ for vacation pay is 12 months preceding the start date of the vacation.
For more information on the nuances of calculating vacation pay, see the article “What is the calculation period for vacation - vacation experience” .
The procedure for indexing vacation pay: examples
Let's look at examples of how vacation pay is indexed depending on the indexation period.
Example 1
From June 1, 2019, T.V. Markova was on vacation for 14 days. During the billing period, from June 1, 2018 to May 31, 2019, the employee’s salary was indexed from 20,000 to 25,000 rubles. The indexation date is November 2018. Markova's billing period was fully worked out. She did not receive bonuses or other payments.
To calculate the amount of vacation pay, it is necessary to determine the SZ. To do this, calculate the CI:
CI = 25,000 / 20,000 = 1.25.
To determine the size of the SZ, it is necessary to divide the billing period into 2 parts: the first part, preceding the increase, was 5 months, from June to October 2018; the second, from November 2018 to May 2019, 7 months. Due to the fact that indexation took place in the billing period, SZ should be indexed for calculating vacation pay from the beginning of the billing period. Thus, the formula should reflect indexation for 5 months (20,000× 1,25 × 5) and calculation of SZ taking into account the new salary (25,000× 7).
SZ = (20,000× 1,25 × 5 + 25 000 × 7) / (29,3 × 12) = 853.25 rub.
The amount of vacation pay will be: 853.25× 14 = 11,945.50 rub.
Example 2
Pushkov A.A. was on vacation from May 17 to May 26, 2019. During the period from May 17, 2018 to May 16, 2019, the employee was not on vacation. The employee’s salary during this period was 759 rubles. On May 22, the organization indexed wages by 5%.
To calculate the amount of vacation pay, we determine how many days were on vacation before indexation and after indexation: from May 17 to May 21 inclusive - 5 days, from May 22 to May 26 - 5 days. In this case, to calculate vacation pay for the first 5 days, the indexation coefficient will not be applied; for the remainder of the vacation, a coefficient of 1.05 must be used.
Thus, the amount of vacation pay for the entire vacation period will be:
5 × 759 + 5 × 759 × 1.05 = 7779.75 rub.
That is, the employee’s vacation pay will be recalculated from the moment of indexation.
Using the above examples, you can once again be convinced that the rules that should be followed when indexing vacation pay depend primarily on the moment when the salary indexation was made: before the date of accrual of the corresponding payments or after.
Is it possible to hold an employer liable if indexation was not carried out?
Some employers, in order not to increase the organization's costs, do not want to index salaries. However, such savings may entail administrative liability for the employer:
- If a local document contains information about wage indexation, but the actual absence of such a procedure, a fine in the amount of 3,000 to 5,000 rubles is imposed on the employer. (Article 5.31 of the Code of Administrative Offenses of the Russian Federation).
- If there is a simultaneous absence of information about indexation in local documents and the indexation itself, a fine for the legal entity employer is from 30,000 to 50,000 rubles, for officials and individual entrepreneurs - from 1,000 to 5,000 rubles. (Part 1 of Article 5.27 of the Code of Administrative Offenses of the Russian Federation).
These are not the only costs that an employer may incur due to the lack of indexation. If an employee, whose interests are infringed by its failure to carry out the work, goes to court, then the employer, in the event of a positive outcome, will have to pay the lost salary for all periods of violation of the law. And the amount of such payment will be obtained by calculating the difference between the indexed salary and the one actually paid (determination of the Primorsky Regional Court dated August 20, 2015 in case No. 33-7280/2015).
Let us note that some arbitrators take the employer’s side and believe that wage indexation is not his responsibility (appeal ruling of the Judicial Collegium for Civil Cases of the Supreme Court of the Republic of Mordovia dated April 30, 2015 in case No. 33-918/2015).
However, there are a number of valid reasons for not indexing. These include:
- the difficult financial situation of the employer (appeal ruling of the Kostroma Regional Court dated May 26, 2014 No. 33-797/2014);
- a good level of employee salaries that does not require an increase (appeal ruling of the Omsk Regional Court dated November 25, 2015 No. 33-8541/2015).
Results
Not every employer is ready to index wages, despite the fact that this is required by law. However, if the enterprise nevertheless decides on such indexation, it is important to follow all the necessary procedures for the correct calculation of payments that are affected by such a change in wages.
In labor legislation, indexation refers to a periodic increase in the level of workers' wages. The essence of this procedure is to compensate for the annual increase in prices for goods and services, that is, the consequences of inflation. Who, in what amount and in what order should index the salary, will be discussed in the article.
What does the law say about wage indexation?
According to many employers, indexation of employee salaries is a voluntary procedure: it does not have to be carried out, especially if the company increases salaries. However, indexing and promotion are different concepts.
An increase in the wages of an organization’s personnel depends on the financial capabilities and desires of the employer, and indexation is a state guarantee of wages for all employees working under employment contracts. In Art. 130 of the Labor Code of the Russian Federation states: measures that ensure an increase in real wages are included in the system of state guarantees for employees. To these measures under Art. 134 of the Labor Code of the Russian Federation refers to the indexation of wages taking into account increases in consumer prices.
It turns out that salary indexing should be carried out by all employers: public and commercial sectors. Only government agencies do this in accordance with the norms of the Labor Code of the Russian Federation and other legal acts, and commercial enterprises - in accordance with the procedure established by a collective agreement or local regulations. The Labor Code of the Russian Federation does not make exceptions for individual entrepreneurs and small enterprises in terms of indexation of employee salaries, therefore, the standard form of an employment contract for micro-enterprises includes the conditions for indexing wages - clause 13 and clause 15 of the Decree of the Government of the Russian Federation of August 27, 2016 No. 858.
Important! For individuals who perform work under civil and industrial conditions, wage indexation is not carried out.
The procedure and timing of salary indexation
According to the Labor Code of the Russian Federation, the indexation procedure is passed down to government institutions through regulations, and in commercial enterprises it is prescribed in internal regulations - Rostrud also points out this responsibility (Letter No. 1073-6-1 dated April 19, 2010).
A commercial organization independently chooses where to prescribe the conditions for indexing employee salaries. This may be a separate Regulation on the organization or a section of a collective or employment agreement. In any case, the document must contain:
frequency of the indexing procedure;
part of the salary that is subject to indexation;
value or indexation coefficient.
The indexation value can be taken as the consumer price index (CPI) established at the end of a certain period from the Rosstat website. You can use the inflation rate enshrined in the federal budget law or the growth rate of the living wage of the working population. Depending on the increase factor, the frequency of indexing is set: monthly, quarterly or annually. When indexing quarterly, it is better to use the cost of living, and when indexing annually, it is better to use the inflation rate.
Indexation is formalized by order of the manager. Employees are familiarized with this order against signature. Information about remuneration for labor is an essential condition of the employment contract (EA), therefore, when changing the salary amount, additional agreements to the EA must be concluded with employees. The manager also issues an order to make changes to the organization’s staffing table.
Indexation is reflected in all employees and is taken into account when calculating average earnings for calculating vacation pay. In this case, the increasing coefficient is calculated in one of the following ways:
- if only salaries were indexed: new salary / salary before indexation;
- if all components of the remuneration system were indexed: (new salary + new payments) / (salary before indexation + previous payments).
Indexation of salaries of public sector employees in 2019
According to the Order of the Government of the Russian Federation dated December 6, 2017 No. 2716-r, from January 1, 2018, the increase for employees of the public sector was 4% - the inflation rate in 2017. The coefficient applies to all employees of state, autonomous and budgetary institutions, federal and civil institutions employees of military units.
In September 2017, the State Duma of the Russian Federation adopted bill No. 1119655-6 in the first reading, which provides for a mandatory increase in wages at least once a year. If the law is adopted, then the Labor Code of the Russian Federation will establish a clear procedure for indexing wages not only for public sector employees, but for employees of commercial enterprises.
Salary indexation in 2019 to the minimum wage
Commercial enterprises are required to index the salaries of employees who receive less than the minimum wage for a full month of work, the value of which, as of May 1, 2018, is 11,163 rubles. Employers should take into account that some regions have their own minimum wage. If an organization has not abandoned the regional minimum wage in time, it should focus on the value established in the region, and not on the federal minimum wage.
Calculation of salary indexation in 2019
Indexing is carried out by increasing the established wage by a certain coefficient. Commercial enterprises choose the indexation coefficient for 2018 on their own. The main thing is to consolidate this condition in the internal documents of the enterprise.
Taking into account what value to index wages - CPI, inflation or the subsistence level of the working population - it is up to the employer to decide. At the same time, the value of officially established indicators is not considered mandatory. For example, if inflation was 5%, the indexation value can be taken as 6-7% or you can choose another indicator in accordance with the regulatory documents of the enterprise.
Example 1. The manager's salary according to the staffing table is 40,000 rubles. According to the Regulations on indexation of employee wages adopted by the organization, wage increases are carried out annually taking into account the level of inflation included in the budget for the next year.
Based on this, the coefficient for 2018 was 1.05.
New manager's salary: 40,000 × 1.05 = 42,000 rubles.
Example 2. In accordance with the collective agreement, the organization indexes employee salaries taking into account the CPI, the value of which is 103%.
If the employee’s salary was 25,000 rubles, taking into account the CPI it will be 25,750 rubles. (25,000 × (103:100)).
Fines for lack of indexation of workers' wages
If an employer ignores the requirement of the Labor Code of the Russian Federation and does not index employees’ wages, he faces administrative fines under the articles of the Code of Administrative Offenses of the Russian Federation:
For failure to comply with the norms of the Labor Code of the Russian Federation and other legal acts that contain labor standards, fines are imposed under Art. 5.27 Code of Administrative Offenses of the Russian Federation: for a manager - 1-5 thousand rubles, for legal entities - 30-50 thousand rubles.
If indexation is provided for in the collective agreement, but is not actually carried out, the violation is punishable under Art. 5.31 of the Code of Administrative Offenses of the Russian Federation, regulating the fulfillment of obligations under a collective agreement: warning or fine of 3-5 thousand rubles.
Failure to comply with the requirements of Art. 130, 134 of the Labor Code of the Russian Federation violates the provisions of Art. 22 of the Labor Code of the Russian Federation, obliging employers to pay wages to employees on time and in full. Responsibility for this is regulated by Art. 5.27 Code of Administrative Offenses of the Russian Federation: maximum fine 50 thousand rubles. The organization will also be required to recalculate employee salaries and pay additional personal income tax and insurance contributions to the budget.
Calculate your salary automatically in the cloud service Kontur.Accounting. The service will help you correctly reflect the premium and pay taxes on it. Use the support of our experts and use the service for free for the first 30 days.
Art. 134 of the Labor Code of the Russian Federation on wage indexation: main provisions of the Labor Code
The main rule on wage indexation is Art. 134 Labor Code of the Russian Federation. Indexation is carried out to bring wages into line with prices for consumer goods and services.
The standards according to which wages are indexed when increasing wages for government agencies and budgetary enterprises are established by legislation and other regulations in this area. The price growth index itself is determined in accordance with the Basic Provisions, approved. Resolution of the State Statistics Committee of the Russian Federation dated March 25, 2002 No. 23 (hereinafter referred to as the Rules for Determining the Index).
For private sector enterprises, the source is their local regulations. The law does not indicate the presence of such an act as mandatory.
But in para. 3 letters of Rostrud dated 04/19/2010 No. 1073-6-1 state that if the internal rules of the organization do not contain an indexation procedure, then it is recommended to add it there. In the report of Rostrud for the 3rd quarter. 2017 contains the opinion that supervisory authorities should force the employer both to carry out indexation and to adopt a local act. In turn, the nature of Rostrud’s instructions on this issue is perceived by the courts in two ways:
- some courts evaluate them as mandatory (determination of the Primorsky Regional Court dated August 20, 2015 in case No. 33-7280/2015);
- others consider them advisory (ruling of the Altai Regional Court dated July 29, 2015 in case No. 33-6987/2015).
We recommend! Given this position of the courts, the adoption of a local act on the indexation procedure seems desirable. In its absence, you can be guided by industry agreements, which will be discussed below.
The procedure for indexing wages in an organization
The procedure for indexing wages, based on the meaning of Art. 134 of the Labor Code of the Russian Federation, can be established by decisions of associations, trade union organizations in various sectors of the economy. Today, there are a number of industry agreements in force, according to which the procedure for indexing wages of workers employed in the relevant industries is determined:
- industry agreement on forestry of the Russian Federation for 2016-2019 dated July 1, 2016;
- industry agreement on organizations of the timber industry complex of the Russian Federation for 2018 - 2020 dated December 27, 2017, etc.
The indexation procedure may be established by departmental regulations. See, for example, the order of Rosrybolovstvo “On the introduction of a new system of remuneration of workers ...” dated October 2, 2008 No. 218.
Sample regulation on wage indexation
In ch. 7 of the Labor Code of the Russian Federation explains the procedure according to which the rules on indexation in collective agreements are established. If such an agreement does not exist or there is no corresponding rule in it, then under Art. 8 of the Labor Code of the Russian Federation, the employer has the right to adopt a local act regulating this area of labor relations.
In Art. 8 of the Labor Code of the Russian Federation establishes that when developing a local act, it is necessary to take into account the opinion of a trade union organization or other body representing the interests of workers. The procedure for relations with the trade union body when developing local acts is regulated in Art. 372 Labor Code of the Russian Federation.
IMPORTANT! Art. 8 of the Labor Code of the Russian Federation stipulates that the rules of a local act that worsen the position of workers established by labor legislation are automatically recognized as illegal and cannot be applied. When adopting such a local act, it is necessary to bring it in accordance with the norms of the Labor Code of the Russian Federation, other legal acts, as well as the collective agreement in force at the enterprise.
If, according to the local act, an agreement between the employer and the trade union body was not reached, then the dispute that arose under Art. 372 of the Labor Code of the Russian Federation is decided by the labor inspectorate or the court. In this case, a protocol is drawn up regarding the fact that a disagreement has arisen, the employer receives the right to adopt an act without the consent of the trade union, which will be in force until the dispute is resolved (or after it, if the dispute is resolved in favor of the employer).
Is indexation mandatory since 2018 and what is its coefficient in 2018 - 2019
According to the Rules for Determining the Index, the value of this indicator is established by the State Statistics Committee and published by it in the monthly economic report.
Speaking about the price index for 2018 - 2019, it is worth noting that according to the economic report of the State Statistics Committee for November 2018, the index was 103.8% compared to the index for November 2017.
Important! However, the analysis of the rules of Art. 134 of the Labor Code of the Russian Federation allows us to conclude that an actual change in the index is not a basis obliging the employer to carry out indexation. Such a document is an internal local act of the organization or a collective agreement.
Risks! In case of failure to comply with the indexation conditions provided for by these documents, the employer must be held liable for violation of labor legislation (see letter of the Ministry of Labor of the Russian Federation dated December 26, 2017 No. 14-3/B-1135).
The actual increase in wages in budgetary institutions is carried out at the expense of the corresponding budget, therefore the rules and time when the indices identified by Goskomstat will be implemented in wages are determined in the budget document (see letter of Rostrud dated October 11, 2016 No. 14-1 / OOG-9076.
For example, the law “On the federal budget for 2015 and for the planning period of 2016 and 2017” dated December 1, 2014 No. 384-FZ determined an increase in pay for government employees by 5.5%. However, by Law dated April 20, 2015 No. 93-FZ, this indexation was abolished.
Employer's obligation: is he obliged to index wages?
The Constitutional Court of the Russian Federation, in its ruling dated November 19, 2015 No. 2618-O, noted that the wages of all employees operating under an employment agreement are subject to indexation. Thus, according to the position of this judicial body, the labor agreement acts as a guarantor of wage increases.
It should be noted that the judicial authorities understand the employer’s obligation to index as relative:
- Depending on whether indexation itself is provided for by the provisions of internal regulations or industry agreements. A similar conclusion was made in the ruling of the Supreme Court of the Russian Federation dated April 24, 2017 No. 18-KG17-10, and the cassation ruling of the Supreme Court of the Republic of Karelia dated May 4, 2010 No. 33-1248/2010.
- Complied with, even if in fact there was a salary increase, but not in the order of indexation, but in a different order (appeal ruling of the Moscow City Court dated August 28, 2014 in case No. 33-34136).
Conclusion! Based on these decisions, we can conclude that the courts recognize the employer’s obligation to increase wages and not index them, which is fully consistent with the state guarantee of ensuring an increase in real wages (based on the meaning of paragraph 4 of Article 130 of the Labor Code of the Russian Federation).
Wage indexation in an employment contract
The condition of the employment contract on wage indexation is not included in the list of mandatory conditions specified in Art. 57 Labor Code of the Russian Federation. According to Part 2 of Art. 57 of the Labor Code of the Russian Federation, the absence of any specified conditions in an employment contract does not deprive it of legal force.
In addition, the article makes reference to the fact that the employment contract may indicate other conditions based on the norms of labor legislation and other sources of law in this area. Thus, it is permissible to include an indexation clause in this agreement.
In this case, it is necessary to determine the terms of indexation, for example, annual indexation of wages. You also need to determine the indexation coefficient. For example, 105%. The parties to the agreement have the right to independently determine the specified indexation rules.
But the rights of an employee cannot be infringed in comparison with the law. This means that the indexation coefficient in the employment agreement cannot be lower than the consumer price growth index.
It is convenient to establish the indexation procedure directly in the employment contract in small enterprises employing 1 or 2 people.
Order on wage indexation: sample
The indexation order is an administrative document, the direct basis for wage indexation. It is drawn up in a form that complies with the rules of office work at the enterprise (GOST R 7.0.97-2016 can be taken as a basis).
- carrying out indexation for the enterprise;
- making appropriate changes to the staffing table and employment contracts;
- calculation of official salaries / payment at the tariff rate in indexed form from a certain date.
Risks! Since indexation will change the amount of wages, it is necessary to conclude additional agreements to employment contracts. Otherwise, there is a risk that Rostrud inspectors will consider it as a change in working conditions at the initiative of the employer and will consider it necessary to notify the employee 2 months in advance.
Thus, labor legislation leaves the right to decide on indexation to the employer. In turn, employees have the right to demand indexation only if a departmental act, industry agreement or local document provides for it and/or no other salary increases have been made.
