Private industry employers spent an average of $27.64 per hour worked for employee compensation in June 2010, the U.S. Bureau of Labor Statistics reported on September 8. Wages and salaries averaged $19.53 per hour worked and accounted for 70.6 percent of these costs, while benefits averaged $8.11 and accounted for the remaining 29.4 percent. Total compensation costs for state and local government workers averaged $39.74 per hour worked in June 2010. Total compensation costs for civilian workers, which include private industry and state and local government workers, averaged $29.52 per hour worked in June 2010.
Employer Costs for Employee Compensation (ECEC), a product of the National Compensation Survey, measures employer costs for wages, salaries and employee benefits for non-farm private and state and local government workers.
Private industry employer costs for retirement and savings benefits varied by occupational group. Private industry retirement and savings benefit costs for management, professional and related occupations were $1.89 per hour, or 3.9 percent of total compensation, in June 2010. Costs were lowest among service occupations, 21 cents or 1.5 percent of total compensation. Included in this amount were employer costs for defined benefit and defined contribution plans.
Civilian
Civilian employer costs averaged $2.60 per hour worked for insurance benefits (life, health and disability insurance), or 8.8 percent of total compensation. In addition to insurance, the other benefit categories are: paid leave (vacation, holiday, sick leave and personal leave), which averaged $2.04 (6.9 percent of total compensation); supplemental pay (overtime and premium, shift differentials and non-production bonuses), which averaged 71 cents per hour worked (2.4 percent); retirement and savings, which averaged $1.31 per hour (4.4 percent); and legally required benefits (Social Security, Medicare, unemployment insurance and workers’ compensation), which averaged $2.30 per hour worked (7.8 percent).
Private industry
Private industry employer costs for paid leave averaged $1.86 per hour worked (6.7 percent of total compensation), supplemental pay averaged 78 cents (2.8 percent), insurance benefits averaged $2.22 (8.0 percent), retirement and savings averaged 96 cents (3.5 percent) and legally required benefits averaged $2.29 (8.3 percent) per hour worked.
Retirement and savings costs in private industry
In June 2010, average costs in private industry for retirement and savings benefits were 96 cents per hour worked, or 3.5 percent of total compensation. The average cost per hour worked for defined benefit plans – retirement plans that typically specify a benefit based on age, years of service, and earnings – was 42 cents (1.5 percent of total compensation). The average cost for defined contribution plans – retirement plans usually based on employer contributions to individual employee accounts – was 54 cents (2.0 percent of total compensation). 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 2010 are available at http://www.bls.gov/news.release/pdf/ebs2.pdf).
Retirement and savings costs were higher, both in amount and as a proportion of total compensation, for union workers ($2.63 and 7.0 percent of total compensation) than for non-union workers (78 cents and 2.9 percent of total compensation). Defined benefit plan costs were significantly higher for union workers ($1.92 and 5.1 percent of compensation) than for nonunion workers (25 cents and 1.0 percent of compensation).
Retirement and savings costs were higher per hour worked in goods-producing industries ($1.50 and 4.6 percent of total compensation) than in service-providing industries (85 cents and 3.2 percent of total compensation). Within goods-producing industries, retirement and savings costs averaged $1.68 per hour in construction and $1.30 per hour in manufacturing. Costs in service-providing industries varied widely, ranging from 11 cents in leisure and hospitality to $1.63 in the information industry.
Retirement and savings costs increased, both in cost per hour worked and proportion of total compensation, with establishment size. Establishments with fewer than 50 workers averaged 52 cents (2.4 percent of total compensation), significantly less than establishments with 500 workers or more, averaging $1.97 (5.0 percent).