Experts explained how annual indexation will affect Russians' incomes.

      11 November 2025 14:23 Society

      The State Duma plans to consider a bill that would oblige employers to annually index their employees' salaries. Indexation must be carried out taking into account the inflation rate for the previous year. The initiative is aimed at protecting workers' incomes amid rising prices and expenses, reports 360.ru.

      The changes are proposed to be made to Article 134 of the Labor Code. Under the new rules, salary indexation would become mandatory for all employers. The amount of the increase must be no less than the previous year's inflation rate. This will help preserve the real purchasing power of workers.

      Yaroslav Nilov, head of the State Duma committee on labor, social policy and veterans' affairs, believes that indexing wages in line with the inflation rate is a fair solution. He notes that wages in the public sector are indexed annually, but such practices are not always followed in the commercial sector.

      Valery Korneev, an economist and Doctor of Business Administration, points to possible negative consequences for employers. He believes that mandatory indexation could become an additional tax burden for businesses.

      Yulia Khaider, vice president of the Association of Managers and Entrepreneurs, also expresses concerns about the bill. She believes the initiative may be populist and aimed at increasing the burden on employers.

      Experts agree that mandatory indexation of wages could lead to the following consequences:

      - Reduction of base salaries and growth of bonuses: Employers may compensate for additional costs by lowering base salaries and increasing bonuses. This will allow them to maintain the overall level of wages but reduce income stability for employees.

      - Workforce optimization: As the burden on businesses grows, companies may begin to cut staff. This will lead to increased unemployment among low-skilled workers.

      - Tax increases: Mandatory indexation of wages will require additional funds from employers. This could lead to higher tax burdens on companies and reduced profits.

      To minimize negative consequences, experts suggest considering alternative indexation options, such as linking it to increases in the minimum wage (MROT). This would help maintain a balance between the interests of workers and businesses.

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