escalator clause

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.

escalator clause

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

Word History and Origins

Origin of escalator clause¹

An Americanism dating back to 1925–30

Example Sentences

Item III: The Big Ten’s new media rights contract, worth approximately $7.5 billion over seven years, includes an escalator clause — in the event of membership expansion — that pushes the total value to $10 billion.

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