escalator clause

American  

noun

1. a provision in a contract calling for adjustments, usually increases, in charges, wages, or other payments, based on fluctuations in production costs, the cost of living, or other variables.

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escalator clause British  

noun

1. a clause in a contract stipulating an adjustment in wages, prices, etc, in the event of specified changes in conditions, such as a large rise in the cost of living or price of raw materials

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Etymology

Origin of escalator clause

An Americanism dating back to 1925–30

Example Sentences

The Big Ten’s contract can contain a huge escalator clause to account for expansion …

From Seattle Times • Aug. 24, 2022

First came reports that the Big Ten’s mammoth new media rights contract includes an escalator clause that carves out hundreds of millions of dollars in case of additional West Coast expansion.

From Seattle Times • Aug. 24, 2022

He is not due a big roster bonus next year, but there is an escalator clause in his contract that could bring his salary to $4.42 million.

From Chicago Tribune • Nov. 7, 2012

Ford did manage to wring some relief in the haggling over the last major contract hangup, which concerned the U.A.W.'s cherished cost-of-living escalator clause.

From Time Magazine Archive

The companies, in return, will pay every worker a $150 bonus this year, grant an additional 3% pay increase for each year of the new contract and continue an unlimited cost-of-living escalator clause.

From Time Magazine Archive