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Ministry of Labor reminded employers of the obligation to index wages

The employer is obliged to provide an increase in the real content of wages. This is reminded by the Ministry of Labor in its letter No.14-1/ООГ-10305 dated 24.12.2018.

Ensuring an increase in the real content of wages includes the indexation of wages due to the increase in consumer prices for goods and services. At present, labor legislation does not establish a uniform wage indexation method for all workers. Indexing rules depend on the source of funding of organizations (budgetary or extrabudgetary) and are determined by:

  • laws and bylaws (for public authorities);
  • collective agreements, agreements, local regulatory acts (for other organizations).

Accordingly, indexation is an increase in the wages of workers on the level of inflation, while the employer has the right to additionally increase the amount of wages to certain categories of workers.

Salary increase can be carried out by:

  • proportional increase in all payments provided by the organization’s wage system and, accordingly, by the employment contract;
  • increase in individual payments included in wages.