Private industry employers spent an average of $27.75 per hour worked for total employee compensation in December 2010, the U.S. Bureau of Labor Statistics reported today. Wages and salaries averaged $19.64 per hour worked and accounted for 70.8 percent of these costs, while benefits averaged $8.11 and accounted for the remaining 29.2 percent. Total compensation costs for state and local government workers averaged $40.28 per hour worked in December 2010. Total employer compensation costs for civilian workers, which include private industry and state and local government workers, averaged $29.72 per hour worked in December 2010.

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 $1.89 per hour worked. Private industry paid leave benefit costs were highest for management, professional, and related occupations, $4.17 per hour, or 8.4 percent of total compensation, in December 2010. Costs were lowest among service occupations, 59 cents, or 4.3 percent of total compensation. Included in this amount were employer costs for vacations, holidays, sick leave, and personal leave. 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.

Employer costs for paid leave benefits averaged $2.77 per hour worked for union workers, significantly higher than the $1.79 per hour average for nonunion workers.

Paid leave costs in goods-producing industries were $2.11, greater than the average for service-providing industries, $1.84, in December 2010. The average cost per hour worked for paid leave in service-providing industries ranged from $3.87 in information to 40 cents in leisure and hospitality.

Paid leave costs varied widely by establishment size in private industry. Paid leave costs for establishments with fewer than 100 workers were $1.28 per hour worked versus $1.95 for establishments with 100 to 499 employees and $3.44 with 500 employees or more.

Legally required benefits costs in private industry

The average cost for legally required benefits was $2.28 per hour worked in private industry (8.2 percent of total compensation) in December 2010. Social Security comprises the largest legally required benefit cost component at $1.32 per hour or 4.8 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.

Costs for other legally required benefits include Workers' compensation, which averaged 42 cents per hour worked (1.5 percent of total compensation); State unemployment insurance, which averaged 18 cents per hour worked (0.7 percent); and Federal unemployment insurance, which averaged just 3 cents per hour worked (0.1 percent).

Employer costs for legally required benefits varied by occupation, industry, bargaining status, and establishment size. The average cost per hour worked for legally required benefits ranged from $3.43 for management, professional, and related occupations to $1.42 per hour for service occupations. The proportion of total compensation represented by legally required benefits ranged from 10.2 percent for service and natural resources, construction, and maintenance workers to 6.9 percent for management, professional, and related workers. Worker's compensation employer costs for construction industry workers were especially notable, averaging $1.32 per hour worked in December 2010.

Other benefit categories in private industry

Private industry employer costs averaged $2.22 per hour worked for insurance benefits (life, health, and disability insurance), or 8.0 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 75 cents per hour worked (2.7 percent); and retirement and savings, which averaged 97 cents per hour (3.5 percent).