Employer costs for employee compensation for civilian workers averaged $28.03 per hour worked in September 2007, the U.S. Department of Labor’s Bureau of Labor Statistics reported on December 11. Wages and salaries, which averaged $19.56, accounted for 69.8 percent of these costs, while benefits, which averaged $8.47, accounted for the remaining 30.2 percent. Employers averaged $2.35 for life, health and disability insurance, or 8.4 percent of total compensation. In addition to insurance, the other benefit categories were: legally required benefits, including Social Security, Medicare, unemployment insurance and workers’ compensation, which averaged $2.22 (7.9 percent of total compensation); paid leave benefits (vacations, holidays, sick leave and other leave), which averaged $1.95 (7.0 percent); retirement and savings, which averaged $1.22 per hour (4.4 percent of total compensation); and supplemental pay (overtime and premium, shift differentials and non-production bonuses), which averaged 72 cents per hour worked.
The Employer Costs for Employee Compensation program is a product of the National Compensation Survey, which measures employer costs for wages, salaries and employee benefits for non-farm private and state and local government workers.
State and local government employers spent an average of $13.24 for benefits for every hour worked in September 2007. This accounted for 33.5 percent of total compensation. Private industry employers averaged $7.66 for benefits, or 29.4 percent of total compensation. State and local government employer costs for health benefits were higher ($4.35) than private industry ($1.85). Retirement and savings costs, which includes both defined benefit and defined contribution plans, were also higher for state and government employers ($3.04) than private employers ($0.92).
Private industry
In September 2007, private industry employer compensation costs averaged $26.09 per hour worked. Private industry employer wages and salaries averaged $18.42 per hour (70.6 percent), while benefits averaged $7.66 (29.4 percent). In September 2007, private industry employer costs for paid leave averaged $1.76 per hour worked (6.8 percent), supplemental pay averaged 78 cents (3.0 percent), insurance benefits averaged $1.99 (7.6 percent), retirement and savings averaged 92 cents (3.5 percent), and legally required benefits averaged $2.21 (8.5 percent) per hour worked.
Compensation costs in state and local governments
In September 2007, employer costs in state and local governments averaged $39.50 per hour worked. State and local government wages and salaries averaged $26.26 per hour (66.5 percent), while benefits averaged $13.24 (33.5 percent). Among state and local government employees, average hourly compensation costs were higher for management, professional and related occupations ($48.35) than for service occupations ($30.74) and sales and office occupations ($27.00). Wages and salaries averaged $33.74 per hour worked for management, professional and related occupations; $18.45 for service occupations; and $16.64 for sales and office occupations. Wages and salaries accounted for 60.0 percent of total compensation for service employees and 61.6 percent for sales and office employees; management, professional and related employees, wages and salaries represented a significantly higher proportion of total compensation (69.8 percent).
For state and local government employees, employer costs for insurance benefits ranged from $3.68 per hour, or 12.0 percent of total compensation for service occupations, to $4.96 per hour worked, or 10.3 percent of total compensation for management, professional and related occupations. For sales and office occupations, employer insurance costs averaged $4.23, or 15.7 percent of compensation. The largest component of insurance costs was health insurance, which averaged $4.35, or 11.0 percent of total compensation for state and local government employees.
In September 2007, the average cost for retirement and savings benefits was $3.04 per hour worked in state and local governments (7.7 percent of total compensation). Included in this amount were employer costs for defined benefit plans, which averaged $2.73 per hour (6.9 percent), and defined contribution plans, which averaged 31 cents (0.8 percent). Defined benefit plans specify a formula for determining future benefits, while defined contribution plans specify employer contributions but do not guarantee future benefits.
A major component of benefit costs is paid leave, including vacations, holidays, sick leave and other leave. The average cost for paid leave was $3.07 per hour worked for state and local government employees. Among occupational groups, the average cost for management, professional and related workers was $3.36, significantly higher than the costs for sales and office workers, which averaged $2.54, and for service workers, which averaged $2.78.
Costs for legally required benefits, including Social Security, Medicare, unemployment insurance (both state and federal) and workers’ compensation, averaged $2.29 per hour worked for state and local government employees. The average cost for management, professional and related workers was $2.65 per hour worked (5.5 percent of total compensation), greater than the costs for sales and office workers, which averaged $1.65 (6.1 percent), and service workers, which averaged $1.90 (6.2 percent).
To read the full report and view all of the data tables, click on the link below:
ftp://ftp.bls.gov/pub/news.release/ecec.txt