Glossary
Prospective increase
An increase that applies to future invoices only, from an effective date forward.
A prospective increase changes the price from an effective date forward. It is the ordinary reading of an anniversary escalator and of most CPI clauses. The past invoices stay as they were issued.
The effective date is the later of the contractual date and the date notice makes it effective, when notice is a condition. That is why a mathematically available increase can still be weeks away from being billable.
Prospective does not mean 'whenever we get around to it, retroactive to January.' If the anniversary passed and notice was late, the effective date slides forward or the cycle is lost, depending on the sentence. It does not silently stay attached to the original anniversary.
The draft customer notice should state the effective date and the new price, and it should not claim prior periods unless the clause allows a true-up and a person has decided to pursue it.
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.