escalator clause

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Escalator clause

Provision in a contract allowing cost increases to be passed on. In an employment contract, for example an escalator clause may call for wage increases in line with inflation.

Escalator Clause

A clause in a contract stating that a certain payment increase will grow each year according to some formula stated in the contract. For example, an employment contract may have an escalator clause allowing for small increases in salary each year. An escalator clause usually exists to protect one party to the contract from inflation.

escalator clause

See escalation clause.

References in periodicals archive ?
Because contracts containing escalator clauses cover a period of more than one year, the percentage of workers covered by COLA clauses depends not only on contracts negotiated that year, but also on contracts negotiated in previous years.
The cyclical conditions prevailing in an industry may also influence the percentage of workers with escalator clauses.
Part-time employees, by virtue of their shorter job horizon, are likely to place a lower value on escalator clauses than do full-time employees.
The percentage of union workers with escalator clauses also depends on regulatory and economic conditions in the industry.
There are escalator clauses based on playing time and performance that could eventually push the deal beyond $10 million.
The second year of the contract includes price escalator clauses which could substantially increase the value of the contract when compared to the first year.
The contracts reduce the cost per ton from $65 to a combined cost of $50 and also contain lower inflationary escalator clauses than existing contracts, which will increase the seven-year savings to more than $200 million, he said.