Glossary
Escalation cap
The maximum a CPI or other index adjustment is allowed to change the price in that step.
A cap cuts the raw index change down when the index runs hot. A 3% cap and a 3.738% CPI-U change means the billable change is 3%, not 3.738%. Billing the raw index overbills the customer and will not survive a reading of the sentence.
Watch what the cap applies to. 'Not more than 3% of the fee then in effect' compounds: each year can add up to 3% of the already-adjusted fee. 'Not more than 3% of the original fee' is a much tighter lifetime limit. They are different contracts.
A cap on the management fee does not cap salt, fuel, repairs, or extra work unless the clause says those items are inside it. Pointing at surcharge revenue and calling the cap satisfied is not what the cap says.
When the cap binds, the worksheet should show the raw percent, the cap, and the price both ways, so the reviewer can see what was given up. That is the point of having agreed a cap.
Related terms
See it used in a worked example · CPI calculator · Request an audit
Sources and limits
Index levels from the U.S. Bureau of Labor Statistics Consumer Price Index, not seasonally adjusted, retrieved through the BLS Public Data API on November 1, 2026. Values are index points, not the headline 12-month percent.
Statewide rates reflect U.S. Department of Labor state minimum-wage postings as updated January 1, 2026, the U.S. Department of State Diplomatic Note on 2026 increases, and, for the prior-year comparison and named local rates, the National Employment Law Project compilation published in November 2025. Confirm the rate that applies to the workplace before using it in a bill.
The contracts in these worksheets are fictional. The prices are chosen so the arithmetic is easy to check. They are not a price survey and they are not client results.
RateClause is not a law firm. Nothing on this page is legal advice. Your clause controls, including whether a past period can be rebilled at all.
Primary postings: BLS Consumer Price Index, U.S. Department of Labor, state minimum wages, U.S. Department of State notice of 2026 minimum-wage increases.