Compensation data for December 2012 shows that private industry employers spent an average of $28.89 per hour worked for total employee compensation, the U.S. Bureau of Labor Statistics reported. Wages and salaries averaged $20.32 per hour worked and accounted for 70.3 percent of these costs, while benefits averaged $8.57 and accounted for the remaining 29.7 percent. Total compensation costs for state and local government workers averaged $41.94 per hour worked. Total employer compensation costs for civilian workers, which include private industry and state and local government workers, averaged $30.84 per hour worked.
Paid leave costs in private industry
Private industry employer costs for paid leave benefits in December 2012 averaged $1.98 per hour worked, or 6.9 percent of total compensation. Paid leave benefit costs by major private industry group were highest for the information industry at $4.12 per hour, or 8.9 percent of total compensation. Costs were lowest for the leisure and hospitality industry at 39 cents, or 3.1 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 were primarily from vacation, holiday, and sick leave benefits. In December 2012, vacation costs averaged $1.03 per hour 3.6 percent of total compensation while holiday costs were 61 cents per hour 2.1 percent and sick leave costs were 25 cents per hour 0.9 percent.
Paid leave costs varied widely by full-time and part-time status and bargaining unit status. Paid leave costs for all full-time workers in private industry were $2.52 per hour worked 7.5 percent of total compensation, significantly higher than part-time workers at just 42 cents, 2.8 percent. Paid leave costs for union workers were $2.82 per hour worked 7.1 percent of total compensation versus $1.90, 6.8 percent for nonunion workers.
Legally required benefits costs in private industry
The average cost for legally required benefits was $2.37 per hour worked in private industry 8.2 percent of total compensation. Social Security comprises the largest legally required benefit cost component at $1.36 per hour or 4.7 percent of total compensation. Legally required benefits such as Social Security and Medicare can be 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 41 cents per hour worked 1.4 percent of total compensation; Medicare, which averaged 33 cents per hour worked 1.2 percent; state unemployment insurance, which averaged 23 cents per hour worked 0.8 percent; and federal unemployment insurance, which averaged 3 cents per hour worked 0.1 percent.
Employer costs for legally required benefits varied by major industry group. The average cost per hour worked for legally required benefits ranged from $3.45 for construction to $1.34 per hour for the leisure and hospitality industry. Workers’ compensation employer costs for construction industry workers were significantly higher than other major industry groups, averaging $1.12 per hour worked in December 2012.
Legally required benefit costs also varied by full-time versus part-time status and bargaining unit status. Legally required benefit costs for full-time workers were $2.62 per hour worked versus $1.65 for part-time workers. Legally required benefit costs were $3.34 for union workers and $2.28 for nonunion workers.
Other benefit categories in private industry
Private industry employer costs averaged $2.36 per hour worked for insurance benefits, life, health, and disability insurance, or 8.2 percent of total compensation. In addition to insurance, the other benefit categories were: retirement and savings defined benefit and defined contribution, which averaged $1.04 per hour worked 3.6 percent; and supplemental pay overtime and premium, shift differentials, and nonproduction bonuses, which averaged 82 cents per hour 2.8 percent.