LaborLinks - Philadelphia - Construction Industry & Labor News: Employer Costs for Employee Compensation – June 2015: Private industry employers spent an average of $31.39 per hour worked for employee compensation in June 2015

Private industry employers spent an average of $31.39 per hour worked for employee compensation in June 2015, the U.S. Bureau of Labor Statistics reported today. Wages and salaries averaged $21.82 per hour worked and accounted for 69.5 percent of these costs, while benefits averaged $9.56 and accounted for the remaining 30.5 percent. Total compensation costs for state and local government workers averaged $44.22 per hour worked in June 2015. Total compensation costs for civilian workers, which include private industry and state and local government workers, averaged $33.19 per hour worked in June 2015.

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. Current employment weights are used to calculate ECEC cost levels, whereas fixed employment weights are used in the Employment Cost Index (ECI). For additional information on comparing changes in compensation measures see the Technical Note in this release.

Retirement and savings costs in private industry

In June 2015, average costs in private industry for retirement and savings benefits were $1.24 per hour worked, or 4.0 percent of total compensation. The average cost per hour worked for defined benefit plans—retirement plans that specify a benefit typically based on age, years of service, and earnings—was 55 cents or 1.8 percent of total compensation. The average cost for defined contribution plans—retirement plans usually based on employer contributions to individual employee accounts—was 69 cents or 2.2 percent of total compensation. (See table 5.)

Employer costs for retirement and savings plans are affected by several factors, including the percentage of employees that participate in the plans offered by their employer. (The National Compensation Survey produces comprehensive data on the percentage of workers with access to and that participate in retirement plans. Data for March 2015 are available at www.bls.gov/news.release/pdf/ebs2.pdf).

Retirement and savings costs varied widely by major occupational group. Costs for management, professional, and related workers were $2.56 per hour worked (4.6 percent of total compensation), compared to $1.94 for natural resources, construction, and maintenance workers (5.7 percent) and 24 cents for service workers (1.6 percent). (See table 5.)

Retirement and savings costs were higher both in amount and as a proportion of total compensation for union workers ($4.05 and 8.7 percent of total compensation) than for nonunion workers (96 cents and 3.2 percent). Defined benefit plan costs were significantly higher for union workers ($2.91 and 6.3 percent) than for nonunion workers (32 cents and 1.1 percent). (See table 5.)

Retirement and savings costs were higher per hour worked in goods-producing industries ($2.04 and 5.5 percent of total compensation) than in service-providing industries ($1.08 and 3.6 percent). Retirement and savings costs for all major industry groups ranged from $2.75 in the information industry to 21 cents in leisure and hospitality. (See table 6 and chart 1.)

Retirement and savings costs increased both in cost per hour worked and proportion of total

compensation with establishment employment size. Establishments with fewer than 100 workers

averaged 72 cents (2.7 percent of total compensation), significantly less than establishments with 500 workers or more, averaging $2.78 (6.0 percent). (See table 8.)

Employer retirement and savings benefit costs for full-time workers in private industry averaged $1.57 per hour worked (4.3 percent of total compensation), significantly higher than 32 cents for part-time workers (2.0 percent). Retirement and savings costs for full-time workers in management, professional, and related occupations averaged $2.78 per hour worked, compared with 95 cents for part-time workers. Employer retirement and savings benefits costs for service workers were significantly lower than all other occupational groups at 39 cents for full-time workers and 10 cents for part-time workers. (See chart 2 and table 11.)

Benefit costs in private industry

Private industry employer costs for paid leave averaged $2.15 per hour worked or 6.9 percent of total compensation, supplemental pay averaged $1.10 or 3.5 percent, insurance benefits averaged $2.57 or 8.2 percent, and legally required benefits averaged $2.50 per hour worked or 8.0 percent. (See table A and table 5.)

Table A. Relative importance of employer costs for employee compensation, June 2015

Compensation Civilian Private State and local

component workers industry government

___________________________________________________________________

Wages and salaries 68.5% 69.5% 63.8%

Benefits 31.5 30.5 36.2

Paid leave 6.9 6.9 7.3

Supplemental 3.0 3.5 0.8

Insurance 8.9 8.2 11.9

Health benefits 8.4 7.7 11.6

Retirement and savings 5.1 4.0 10.2

Defined benefit 3.2 1.8 9.4