What is salary indexation and what to do if the employer does not index the salary.

There is a process of salary indexation in Ukraine, which is carried out regularly, but there may be exceptions during times of war. Before signing an employment contract, it is necessary to understand what salary indexation is and how it is carried out. It is also important to know what to do if the employer does not index the salary.

Salary and its indexation: what every employee in Ukraine needs to know

Salary indexation compensates for the decrease in purchasing power due to inflation. It is carried out in accordance with the law and regulated by regulatory acts. The main goal of indexation is to protect the real incomes of workers from inflation, that is, to increase wages in proportion to the increase in prices for goods and services.

All workers are subject to indexation, regardless of ownership form and organizational and legal form of the enterprise.

When is salary indexation carried out?

Salary indexation is carried out when the consumer price index exceeds 103%. That is, indexation is not carried out in case of insufficient inflation.

The inflation index is calculated monthly, but indexation is not carried out if inflation does not exceed 103%. Salary indexation is calculated from the current salary depending on the inflation rate.

How is indexation carried out?

The inflation index is calculated monthly and applied to the base salary to determine the size of the indexation and increase in wages.

If the employer does not index the salary, the employee can request in writing to conduct indexation. If this does not help, you can contact the trade union or the State Labor Inspectorate. In extreme cases, a lawsuit can be filed.