Employer Costs for Employee Compensation – September 2015

Source: U.S. Bureau of Labor Statistics, News Release, USDL-15-2329, December 9, 2015

Employer costs for employee compensation for civilian workers averaged $33.37 per hour worked in September 2015, the U.S. Bureau of Labor Statistics reported today. Wages and salaries averaged $22.88 per hour worked and accounted for 68.6 percent of these costs, while benefits averaged $10.48 and accounted for the remaining 31.4 percent. Total employer compensation costs for private industry workers averaged $31.53 per hour worked in September 2015. Employer Costs for Employee Compensation (ECEC), a product of the National Compensation Survey, measures employer costs for wages and salaries, and employee benefits for nonfarm private and state and local government workers.

Compensation costs in state and local government

State and local government employers spent an average of $44.66 per hour worked for employee compensation in September 2015. Wages and salaries averaged $28.45 per hour and accounted for 63.7 percent of compensation costs, while benefits averaged $16.21 per hour worked and accounted for the remaining 36.3 percent. Total compensation costs for management, professional, and related workers averaged $54.02 per hour worked. This major occupational group includes teachers, averaging $60.92 per hour worked. Total compensation for sales and office workers averaged $30.83 per hour worked and service workers averaged $34.02. (See chart 1 and table 4.)

For state and local government employees, employer costs for insurance benefits averaged $5.34 per hour, or 12.0 percent of total compensation. The largest component of insurance costs in September 2015 was health insurance, which averaged $5.20, or 11.6 percent of total compensation. (See chart 2 and table 3.)

In September 2015, the average cost for retirement and savings benefits was $4.63 per hour worked in state and local government, or 10.4 percent of total compensation. Included in this amount were employer costs for defined benefit plans, which averaged $4.26 per hour (9.5 percent of total compensation), and defined contribution plans, which averaged 37 cents (0.8 percent). (See chart 2 and table 3.) Defined benefit plans specify a formula for determining future benefits, while defined contribution plans specify employer contributions but do not guarantee the amount of future benefits. Two components of benefit costs are paid leave and legally required benefits. Paid leave benefit costs include vacation, holiday, sick leave, and personal leave. The average cost for paid leave was $3.24 per hour worked for state and local government employees. Costs for legally required benefits, including Social Security, Medicare, unemployment insurance (both state and federal), and workers’ compensation, averaged $2.63 per hour worked. (See table 3.)….