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

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

One reason that temporary price increases turned into permanent wage increases in the middle of the 20th century is that many union contracts had escalator clauses that tied wage gains directly to inflation.

From New York Times

“Maybe the escalator clause concept gives everybody a little something to brag about,” Blunt said.

From Washington Post

Players can also vote to implement an escalator clause to increase salaries by up to 5% each year — which provides bigger contracts for some but also increases the amount of escrow money withheld.

From Seattle Times

They can even trigger an “escalator clause” within the CBA allowing the cap threshold to be pushed up to 5% higher for any given season.

From Seattle Times