Which of the following statements is TRUE of cost-of-living adjustments (COLAs)?
A) COLAs are provided to employees only if the company makes a profit.
B) The value of the COLA changes from employee to employee based on performance.
C) The majority of collective bargaining agreements provide for monthly COLA adjustments.
D) The value of the COLA is based on the consumer price index (CPI).

Question

Quizplus · Accepted Answer

Cost-of-living adjustments (COLAs) are typically based on the consumer price index (CPI), which measures changes in the price of a basket of goods and services over time. COLAs are designed to help employees keep up with inflation and maintain the purchasing power of their wages. They are often included in collective bargaining agreements and may be provided on a regular basis, such as annually or semi-annually, depending on the terms of the agreement. The value of the COLA is typically the percentage increase in the CPI over a specific period of time. COLAs are not typically tied to profitability or individual employee performance.

Which of the Following Statements Is TRUE of Cost-Of-Living Adjustments