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Simple English definitions for legal terms
COLA
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A quick definition of COLA:
Term: COLA
Definition: COLA stands for Cost-of-Living Adjustment. It is a way to adjust salaries or benefits to keep up with the rising cost of goods and services. For example, if the cost of living goes up by 3%, a COLA of 3% would be added to a person's salary or benefits to help them keep up with the increased expenses.
A more thorough explanation:
Definition: COLA is an abbreviation for Cost-of-Living Adjustment. It refers to an increase in wages or benefits that is made to keep up with the rising cost of living.
Example: Many companies offer their employees a COLA each year to help them keep up with inflation. For example, if the cost of living increases by 3%, an employee who earns $50,000 per year might receive a COLA of $1,500 to help offset the higher cost of goods and services.
Explanation: The example illustrates how a COLA works in practice. When the cost of living goes up, wages and benefits may not be enough to cover the increased expenses. A COLA helps to bridge that gap by providing additional income to employees. This can help them maintain their standard of living and avoid falling behind financially.