Wednesday, March 11, 2015

Employer Costs for Employee Compensation – December, 2014: Wages and salaries = 68.4% / Benefits = 31.6 % of Total Compensation Package



GMCS Commentary: The following BLS statistical data is an excellent resource for employers interested in comparing and benchmarking their own compensation data against a national data set.  The information within contains a detailed cost per hour of the most common compensation components and is an excellent resource for interested employers.  Additionally, for our clients engaged in collective bargaining this year, this is an excellent resource to gauge/measure/compare your current wage and H&W benefit allocations going into negotiations.  For those engaged in collective bargaining, following this link will provide a detailed analysis and breakdown for bargaining unit employees. GMCS clients receive a summarized report of this data to further assist their organizations in collective bargaining. 


EMPLOYER COSTS FOR EMPLOYEE COMPENSATION – DECEMBER 2014


Private industry employers spent an average of $31.32 per hour worked for total employee
compensation in December 2014, the U.S. Bureau of Labor Statistics reported today. Wages and salaries averaged $21.72 per hour worked and accounted for 69.4 percent of these costs, while benefits averaged $9.60 and accounted for the remaining 30.6 percent. Total compensation costs for state and local government workers averaged $43.95 per hour worked in December 2014. Total employer compensation costs for civilian workers, which include private industry and state and local government workers, averaged $33.13 per hour worked in December 2014.

Employer Costs for Employee Compensation (ECEC), a product of the National Compensation Survey, measures employer costs for wages, salaries, and employee benefits for nonfarm private and state and local government workers.

Paid leave costs in private industry:

Private industry employer costs for paid leave benefits averaged $2.16 per hour worked in December 2014.  Private industry costs for paid leave include vacation leave which averaged $1.13 per hour worked, holiday leave which averaged 66 cents, sick leave which averaged 26 cents, and personal leave which averaged 12 cents in December 2014.  Paid leave benefit costs are often directly linked to wages; therefore, higher paid occupations or industries will typically show higher estimates for this compensation component.

Private industry paid leave benefit costs were highest for management, professional, and related occupations at $4.67 per hour worked, or 8.4 percent of total compensation, in December 2014. Costs were lowest among service occupations at 56 cents, or 3.9 percent of total compensation. (See table 5.)

Included in this amount were employer costs for vacations, holidays, sick leave, and personal leave.

The average cost per hour worked for paid leave by major industry group ranged from $4.82 in
information to 41 cents in leisure and hospitality.  (See table 6.)

Paid leave costs varied widely by full-time and part-time status in private industry in December 2014. Paid leave costs for full-time workers were $2.77 per hour worked versus 45 cents for part-time workers.  (See chart 1 and table 12.)

For information on paid leave provisions, see National Compensation Survey: Employee Benefits in the United States, March 2014, at www.bls.gov/ncs/ebs/benefits/2014/benefits.htm.

Legally required benefit costs in private industry:

The average cost for legally required benefits was $2.50 per hour worked in private industry (8.0 percent of total compensation) in December 2014. Social Security comprises the largest legally required benefit cost component at $1.44 per hour or 4.6 percent of total compensation. Legally required benefits such as Social Security and Medicare are often directly linked to wages; therefore, higher paid occupations or industries will typically show higher cost estimates for this compensation component.  (See table 5.)

Costs for other legally required benefits include workers’ compensation which averaged 44 cents per hour worked (1.4 percent of total compensation), state unemployment insurance which averaged 22 cents per hour worked (0.7 percent), and federal unemployment insurance which averaged just 4 cents per hour worked (0.1 percent). (See table 5.)

The average cost per hour worked for legally required benefits by major industry group ranged from $3.80 for construction industry workers to $1.40 per hour for leisure and hospitality. For construction industry workers, workers’ compensation costs averaged $1.32 per hour worked, significantly higher than all other major industry groups. The proportion of total compensation represented by legally required benefits ranged from 10.6 percent for leisure and hospitality workers to 6.4 percent for both information and financial activities workers. (See chart 2 and table 6.)

Other benefit categories in private industry:

Private industry employer costs averaged $2.54 per hour worked for insurance benefits (life, health, and disability insurance), or 8.1 percent of total compensation. In addition to insurance, the other benefit categories were: supplemental pay (overtime and premium, shift differentials, and nonproduction bonuses), which averaged $1.10 per hour worked (3.5 percent); and retirement and savings, which averaged $1.30 per hour (4.2 percent). (See table A and table 5.) 

Table A.  Relative importance of employer costs for employee compensation, December 2014

Compensation                         Civilian        Private        State and local
component                              workers        industry       government
______________________________________________________________________________
Wages and salaries                 68.4%          69.4%            64.1%
Benefits                                   31.6 %        30.6%             35.9%
       Paid leave                           7.0              6.9                  7.3
       Supplemental pay               3.0              3.5                  0.8
       Insurance                            8.8              8.1                11.9
          Health benefits                8.4              7.6                11.6
       Retirement and savings      5.3              4.2                10.1
            Defined benefit              3.3              2.0                 9.2
            Defined contribution     1.9              2.2                 0.9
       Legally required                 7.6              8.0                 5.9
______________________________________________________________________________

The Employer Costs for Employee Compensation for March 2015 is scheduled to be released on
Wednesday, June 10, 2015, at 10:00 a.m. (EDT).

Employer Costs for Employee Compensation data on total compensation, wages and salaries, and benefits in private industry are produced annually for 15 metropolitan areas. Metropolitan area data will be included in the March 2015 news release on June 10, 2015. For further information about metropolitan area ECEC estimates see the September 2009 article: “BLS Introduces New Employer Costs for Employee Compensation Data for Private Industry Workers in 15 Metropolitan Areas,” at www.bls.gov/opub/mlr/cwc/bls-introduces-new-employer-costs-for-employee-compensation-data-for-private-industry-workers-in-15-metropolitan-areas.pdf.

Supplemental tables with occupational, establishment size, and bargaining status series for detailed industries are available at www.bls.gov/ncs/ect/sp/ecsuphst.pdf and ww.bls.gov/ncs/ect/sp/ecsuptc33.pdf.

Relative standard errors for all cost estimates in the most recent news release and supplementary tables are available at www.bls.gov/ncs/ect/sp/ecsuprse.pdf.

Historical ECEC data are available in three listings, all available at www.bls.gov/ect/#tables. The first historical listing covers data for the March reference periods from 1986 to 2001. These data use the Standard Industrial Classification (SIC) and Census of Population occupational classification systems.

The second listing contains data for the March, June, September, and December reference periods from March 2002 to December 2003. These data are also based on the SIC and Census of Population occupational classification systems. The final listing includes data for March 2004 to the current reference period.  These are based on the North American Industry Classification System (NAICS) and Standard Occupational Classification (SOC) systems.

Information in this release will be made available to sensory impaired individuals upon request— Telephone:  (202) 691-5200; Federal Relay Service:  (800) 877-8339.

BLS news releases, including the ECEC, are available through an e-mail subscription service at:



Last Modified Date: March 11, 2015

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