A cost-of-living adjustment clause
A) is required in all government employee contracts.
B) forces an employer to increase wages at the same rate of inflation.
C) states that no raise can be less than the rate of inflation.
D) is not allowed for private employees.
E) forces an employer to increase wages at a rate higher than inflation.

Question

Quizplus · Accepted Answer

A cost-of-living adjustment clause in a contract typically requires an employer to increase wages at the same rate of inflation, rather than a rate higher than inflation or a set amount. This is common in some government employee contracts, but not required in all contracts or restricted to government employees. The clause also does not typically state that no raise can be less than the rate of inflation.

A Cost-Of-Living Adjustment Clause