How to properly prepare a written justification for a salary increase?

Legal basis for salary increases

The amount of money that must be paid to the employee based on the results of work is fixed in the employment contract. This is the salary that an employee is entitled to for all the time worked or the amount of work performed.

Salaries are paid monthly, and their amounts are regulated by Article 135 of the Russian Labor Code. Article 134 of the Labor Code states that it is necessary to increase wages. This is due to inflation in the country and rising prices.

At the same time, the HR and accounting departments need to carry out very painstaking work so that the salary increase is justified and formalized properly.

According to Article 129 of the Labor Code, wages can be increased in the following ways:

• raise the tariff rate;
• raise the base salary, which is specified in the employment contract.

In addition, management can set increased percentages on compensation and rates, and decide on bonuses and additional payments. Such additional funds are listed in Article 129 of the Labor Code, which states that the manager can personally decide to increase the salaries of his employees, on his own initiative.

We are changing the staffing table

Both the above order and the additional agreement are all the grounds for changing the staff . In this case, the algorithm will be like this:

• by order we make changes to the staff;
• By another order we approve the schedule.

An order to amend the staffing table is a document on the main activity. Its text will be something like this: “In connection with the change in the cashier’s salary, make changes to the staffing table .

Accordingly, a responsible person is appointed who is authorized to develop the staffing table.

After this, the schedule is approved.

Increasing the salaries of all company employees

An increase in wages may affect all employees of the enterprise at the same time. In this case we are talking about indexing. As Article 134 of the Labor Code states, indexation must be carried out annually, because prices change in the state and there is an inflation index. The possibility of increasing wages should be reflected in the clauses of the employment agreement. You can also use special administrative acts.

Sometimes employers, who have the right to independently raise wages, establish that indexation is carried out once a quarter or once every six months. In this case, the head of the enterprise himself can set the date of such an event.

Most often, wage increases are planned for the end of the year, when the government, the Central Bank and statistical authorities announce information on the level of inflation in the country. A special coefficient or percentage is used by which the salaries of all personnel are raised.

The coefficient may vary; its calculation depends on the level of consumer prices, inflation, minimum wage and other factors.

Important

If an organization is subject to an industry agreement and has not provided a waiver of participation in the association of employers in advance, it is obliged to take into account the conditions prescribed in Article 48 of the Labor Code.

Calculation of salary indexation in 2021

Indexing is carried out by increasing the established wage by a certain coefficient. Commercial enterprises choose the indexation coefficient for 2021 on their own. The main thing is to consolidate this condition in the internal documents of the enterprise.

Taking into account what value to index wages - CPI, inflation or the subsistence level of the working population - it is up to the employer to decide. At the same time, the value of officially established indicators is not considered mandatory. For example, if inflation was 3%, the indexation value can be taken as 6-7% or you can choose another indicator in accordance with the regulatory documents of the enterprise.

Example 1. The salary of a manager according to the staffing table is 40,000 rubles. According to the Regulations on Indexation of Employee Wages adopted by the organization, wage increases are carried out annually taking into account the level of growth in consumer prices.

Based on this, the coefficient for 2021 was 1.03.

New manager's salary: 40,000 × 1.03 = 41,200 rubles.

Example 2. In accordance with the collective agreement, the organization indexes employee salaries taking into account the CPI, the value of which is 103%.

If the employee’s salary was 25,000 rubles, taking into account the CPI it will be 25,750 rubles. (25,000 × (103:100)).

Increasing the salary of an individual employee

If we are talking about increasing the salary of an individual employee, then the procedure must be justified. There is Article 132 of the Labor Code, which prohibits discrimination against employees. One should also take into account Article 3 of the Labor Code, which states that an employee cannot receive additional benefits because of his religion, social status, language, financial status, gender and race.

That is, you can apply for a salary increase solely on the basis of your own labor achievements and qualifications. The employee himself may demand an increase in wages if management does not show such initiative. In this case, the employee needs to write a statement justifying why he deserves a salary increase and what benefits the company received thanks to his work. The application must contain a request for a salary increase.

For example, you can write : “I ask you to raise my salary, since under my leadership the department has increased sales volumes.” If management meets the employee halfway, an appropriate order is issued to increase the salary or tariff.

How does the minimum wage affect employee wages?

The minimum wage, which stands for minimum wage, is set at the state level. In 2021, Federal Law No. 421 is in force in the Russian Federation, in which the minimum wage is set at 9,489 rubles. This is 85% of the living wage. In the future, the government plans to equalize both of these indicators, so the minimum wage will increase, which employers should take into account.

Important

Each Russian region has its own minimum wage, established by local authorities. This is what local employers need to focus on.

As Article 133 of the Labor Code states, the monthly income of an employee who has worked the entire reporting period cannot be less than the minimum wage, so this is a very important indicator. True, if an enterprise is not subject to the minimum wage agreement in the region, changes in this indicator will not affect the wages of its employees.

Salary in the employment contract

According to Article 57 of the Labor Code, the salary amount must be specified in the employment contract . Therefore, the common phrase “salary is not less than the minimum wage” is not legal, although it is still used by some personnel officers. Specific numbers must be written!

If the director, in order to save money, orders the contract to indicate the minimum wage according to the law (in 2021 it is 6,204 rubles), then the contracts have to be changed every year . Although the change in salaries may not be tied to the minimum wage, the reasons may be completely different, for example:

• promotion on an individual basis (for example, to an excellent employee);
• promotion for the entire team due to increased income;
• reduction due to changes in staffing structure or production technology.

In any case, the same procedure must apply.

Justification of the reasons for salary growth

Wage increases must be justified. Therefore, management has to take care of the proper execution of this process and draw up documents that will confirm that the decision was made lawfully.

The employee whose salary is going to be increased must be notified in advance. In particular, this is provided for in Article 74 of the Labor Code, according to which the manager must tell the employee why his salary will be increased. This must be done in writing, two months before the planned salary increase.

Important

The employee whose salary will be increased must sign the document to prove that he knows about management’s plans.

The main reasons for the increase in wages are inflation in the country and special circumstances. The latter include:

• Obtaining higher education that corresponds to the employee’s specialization. In this case, the document on the basis of which the salary will be increased will be the diploma provided by the employee.
• Increased qualification level. For example, an employee has completed special courses and trainings necessary to perform his duties, providing a document confirming their completion.
• Solid employee experience. For example, after working for 10 or 15 years at an enterprise, you can count on an increase in wages, if, of course, the employee’s qualifications also grew along with the experience gained.
• Receiving additional education.

If the increase in salaries is associated with the situation in the country’s economy, that is, an increase in prices for basic goods and inflation, it will be enough to issue an appropriate order indicating this reason.

Important

If the salary has increased due to inflation, there is no need to notify the employee in advance; the employer must notify the entire team unilaterally.

What is the basis for an employee’s demand for a salary increase?

First, let's clarify what is not the basis for increasing your salary:

• difficult financial situation;
• illness of the employee or his family members;
• exorbitant loans and mortgages, etc.

With such problems, you need to go to your boss for help, barely hoping for success, because it is a rare family that does not have these problems. As a rule, “beggars” are not liked.

Whether blackmailing management with the statement “either you raise my salary or I’m leaving for a competitor” is appropriate is up to you to decide, but most often it doesn’t work. Nobody likes ultimatums, least of all employers.

The request for a salary increase must be justified in writing; it is better to submit it in writing through the secretary. The boss will have time to weigh the pros and cons before refusing or increasing your salary. Now, how to draw up this statement, where everything must be justified so that there are no grounds for refusal:

1. If the range of your responsibilities is clearly defined by the job description, and you have long been pulling a load of additional responsibilities completely free of charge, then you should very carefully draw up a statement or report, sensibly state the essence of the problem and ask to review your salary with a tendency to increase.
2. You have long been receiving less than the regional average for the same work. First you really need to find out how much your services cost on the regional market, and then put it all in a statement, adding a request for a salary increase.
3. While on the job, you have completed advanced training courses, received a certificate, and can present it to management as an argument that you deserve a higher salary. It is very easy to substantiate your request in this case; it is enough to submit a document confirming completion of the course.
4. You received a second higher education in absentia or, having a college diploma, graduated from a university - all this is a serious reason to review the level of your salary. True, only if you know how to work and there are no complaints for careless performance of job duties.

Registration of salary increase

Proper documentation of salary increases includes the following processes:

1. A corresponding order is drawn up (form T5). The document must indicate the date from which the employee’s or employee’s salary will increase. If there are several employees, it is advisable to arrange their list in the form of a table. Or issue several orders. Specify the passport details of the staff members whose salaries will be raised, and the number of the department in which they work;

Important

If, along with an increase in wages, an employee receives a promotion, that is, a new position, this must be indicated in the order.

1. When the order is issued, you need to make changes to the employee’s documents. We are talking about documents from the HR department. In particular, data on salary growth should be included in the additional agreement, which is filed with the existing employment contract. Changes are made to the employee’s personal card, and if he has a new position, then to the work book.
2. If the salary of all personnel is raised, it is advisable to issue an order on remuneration in advance, which indicates the prospect of indexation. This document will be required to be signed by all employees upon review at the time of employment. In this case, indexation is carried out on the basis of an order and additional agreements to the employment contract are not needed.
3. A certificate with a list of employees whose salaries are to be increased is sent to the accounting department. The document must indicate how much each amount of remuneration has increased. You can enter a percentage or coefficient if we are talking about the overall growth of salaries in the enterprise.

The date the order for salary increase is issued will become the start date of new payments.

Remember

If the manager issued an order, for example, on the 12th, and increased salaries began to be accrued only on the 1st of the next month, this violates the rights of employees. They can complain to the labor inspectorate. In addition, all documents drawn up during the salary increase must be signed by both the manager and the affected subordinate. This will help avoid conflict situations in the team and will become an evidence base.

How to formalize a change in official salary

Where to begin?

As a rule, an employee’s immediate supervisor asks for an increase in salary. He draws up a memo (sample on page 39.). As for reducing the official salary, the desire of the line manager is not taken into account. The salary amount can be reduced only for reasons related to changes in organizational or technological working conditions (Article 74 of the Labor Code of the Russian Federation). These could be changes in equipment and production technology, improvement of jobs based on their certification, structural reorganization of production. The main thing is that the employee’s position does not worsen in comparison with the terms of the collective agreement or agreement*. Otherwise, if the employee goes to court, the change in salary will be declared illegal.

Example

Nadezhda K. worked as a foreman in conveyor shop No. 3 at . After a complete modernization of the workshop and replacement of old technical equipment with new ones, Nadezhda’s work became much easier. Now she did not need to manually set up the conveyor belt and constantly monitor its performance. These functions were performed by automata. In connection with these circumstances, the plant management decided to reduce the foreman’s salary by 1,500 rubles.

Preparatory stage

Based on the memo, an order to amend the staffing table (sample on page 40), which notes how the salary changes: increases or decreases.

Speaking about increasing and decreasing an employee’s official salary, we must not forget that the terms of remuneration (including official salary) are mandatory conditions of the employment contract (Article 57 of the Labor Code of the Russian Federation). If it is necessary to change a mandatory condition of the contract, the employee and employer must enter into an additional agreement (sample on page 41).

The process of salary reduction should be examined in more detail. The employee should be notified in writing of an upcoming unilateral change to a mandatory condition of the employment contract no later than two months in advance (Article 74 of the Labor Code of the Russian Federation). This is the general rule. There are two exceptions to this. For an individual employer, the threshold is set at 14 calendar days (Article 306 of the Labor Code of the Russian Federation). A religious organization is given 7 calendar days to do this (Article 344 of the Labor Code of the Russian Federation).

The employee is given a notice , which he receives against signature (sample on page 42). If an employee does not agree to work under the new conditions, the employer is obliged to offer him another job in writing. This can be either a vacant position or work corresponding to the employee’s qualifications, or a vacant lower position or lower-paid work that the employee can perform taking into account his state of health (Article 74 of the Labor Code of the Russian Federation). To do this, the employee is given a list of suitable vacancies (indicating the amounts of official salaries) against signature.

It is noteworthy that the employer must offer the employee the vacancies available to him in the given locality (that is, the localities within the administrative-territorial boundaries of the relevant locality). It is necessary to offer vacant positions in other localities only if this is provided for by a collective agreement, agreements, or employment contract (Article 74 of the Labor Code of the Russian Federation). If, as a result, the employee refuses the offered job or there is no suitable job in the organization, the employment contract is terminated on the basis of clause 7 of part one of Art. 77 of the Labor Code (sample dismissal order - on page 43).

If, in the event of a reduction in wages, notification of the employee in advance is necessary, then a natural question arises. Is it necessary to warn the employee if the salary increases? Let us turn again to Article 74 of the Labor Code. When reading its first part literally, it becomes clear that it regulates relations regarding the reduction of official salary: in the case when, for reasons related to changes in organizational or technological working conditions, the terms of the employment contract determined by the parties cannot be maintained , their change is allowed at the initiative of the employer , with the exception of changes in the employee’s labor function.

Therefore, a different rule applies to increasing official salary. It can become larger at any time by agreement of the parties to the employment contract. There is no need to wait two months and no notifications are needed (Article 72 of the Labor Code of the Russian Federation).

Preparing a key order

So, an additional agreement to the employment contract on changing the official salary was signed. Next, you need to prepare an order. The difficulty is that there is no unified form** for this case. Therefore, the order is drawn up in free form (sample on page 44). This order completes the process of changing the employee’s official salary. Next, the personnel officer familiarizes the employee with the order, gives a copy of it to the accounting department to calculate wages, files the necessary documents in his personal file, etc.

Colleague's comment

Anna SHCHETININA,

Head of the HR department of IA Don-Consultant LLC (Rostov-on-Don):

– In practice, it happens that personnel officers, when preparing an order to change the official salary, use form No. T-5 (order (instruction) to transfer an employee to another job). This is explained by the fact that some developers of personnel programs lose sight of documents prepared in free form. And in this case, HR specialists are forced to prepare transfer orders so that they are taken into account by the program. Here we can recommend one thing. Any information base, especially such a complex one as personnel or accounting, is usually serviced by a specialist from the developer. You can contact him with a request to add the missing forms to the program. Then the work will become easier, and office work will be carried out according to all the rules.

* Article 74 of the Labor Code of the Russian Federation, paragraph 21 of the resolution of the Plenum of the Supreme Court of the Russian Federation of March 17, 2004 No. 2 “On the application by the courts of the Russian Federation of the Labor Code of the Russian Federation.”

** Resolution of the State Statistics Committee of Russia dated January 5, 2004 No. 1.

Olga Derzhavina, Personnel Affairs

additional agreement to the employment contract on salary changes

salary reduction in staffing table

order to increase wages

salary increase order

salary reduction

Tips for employers to increase wages

The main mistake an employer can make is to rely on personal motives when raising wages. You cannot raise an employee’s salary simply because he is a relative, he has a good relationship with his boss, and he is liked by the team. It is necessary to be based on the professional qualities, successes, achievements of the employee, his importance to the enterprise.

For example : it is unfair if the salary of the deputy store manager has increased significantly, but the salary of the manager himself has remained at the same level.

It is not recommended to separately raise the salaries of employees who work in the same position and perform the same work. In this case, it is advisable to award a bonus to the distinguished employee.

The law regulates only a few individual issues relating to wage increases. There are no specific, step-by-step instructions that would be contained in the laws of the Russian Federation or codes. We have presented the most common procedure, generally accepted at most enterprises, for justifying and processing wage increases. It is legally sound and serves as a clear recommendation.

What is wage indexation in simple words?

Receiving the same salary, a person will gradually be able to buy fewer and fewer goods with it. The decrease in the value of money over time is called inflation. It is an integral feature of any economy. Even the most developed countries are affected by inflation.

To ensure that the real value of the salary received does not decrease, it is necessary to periodically carry out indexation. The value should be calculated based on the inflation rate.

Right or obligation

The obligation to perform indexing is formulated in Article 134 of the Labor Code of the Russian Federation. It looks at payments to government employees and salaries received by employees in private businesses.

Indexation is one of the types of government guarantees. Its implementation for civil servants’ salaries is mandatory and is carried out in accordance with the law. In private business, this procedure is also mandatory and is carried out in accordance with internal regulations, collective agreements or labor agreements.

It is generally accepted that indexation is an increase in wages by a certain amount of percentage, calculated in such a way as to compensate for the effect of inflation. In most cases this is true, however, it can be achieved in other ways. The head of the company can increase payments in other ways, for example, by increasing employee salaries by fixed amounts. If inflation is compensated for, then this can be counted as indexation. This is possible provided that the company’s local documentation states that it can be carried out in this way.

Salary indexation is the responsibility of the management of the organization or company. The specific procedure for its implementation is not considered in the Labor Code of the Russian Federation.

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