COMP NEWS – Data shows that employers are spending more on employees’ overall compensation than usual, but that the gap is shrinking at total compensation costs slow down.
Employers spent more on employees’ overall compensation from March to June this year, according to figures released today, but the pace at which they are hiking total compensation is slowing.
According to the latest Employer Costs for Employee Compensation report, released September 12 by the U.S. Bureau of Labor Statistics (BLS), employers spent just 0.59 percent more on wages and benefits in June 2023 compared to March 2023.
Total employer compensation costs for private-industry workers averaged $41.03 per hour worked. Wages and salaries averaged $28.97 per hour worked, accounting for 70.6 percent of employer costs, while benefits costs averaged $12.06 per hour worked, accounting for the remaining 29.4 percent, according to the report.
That’s up just slightly from the total employer compensation costs for those same workers in March: Then, total employer compensation costs for private-industry workers averaged $40.79 per hour worked. Wages and salaries averaged $28.76 per hour worked, accounting for 70.5 percent of employer costs, while benefits costs averaged $12.02 per hour worked, accounting for the remaining 29.5 percent, according to the BLS’ previous report.
Aside from pay, benefits are also taking a bite out of employers compensation costs.
Aside from pay, what’s taking the biggest cost bites for private-industry workers? Paid leave (vacation, sick, holiday and personal) and insurance (health, life and short- and long-term disability) take a sizable bite out of total compensation, both accounting for 7.4 percent of total compensation, according to the BLS report. Health insurance on its own accounts for 6.9 percent of total compensation.
Legally required benefits, including Social Security and Medicare, account for 7.5 percent.
Total benefits costs cover 18 items across five major categories, according to the BLS. Those are paid leave (vacation, holiday, sick, and personal leave); supplemental pay, such as overtime and premium; insurance (life, health, short-term and long-term disability); retirement and savings; and legally required benefits, such as Social Security and Medicare.
To read more about the growth in total compensation costs, click here.
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