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This report includes a summary of key changes, including the salary level test and salary basis test.

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September 26, 2005
Employer Costs for Employee Compensation

Employer costs for employee compensation averaged $24.24 per hour worked in private industry in June 2005, according to the Department of Labor's Bureau of Labor Statistics.

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Wages and salaries averaged $17.21 per hour (71.0 percent), while benefits averaged $7.03 (29.0 percent). Employer costs for paid leave averaged $1.54 per hour worked (6.3 percent), supplemental pay averaged 69 cents (2.9 percent), insurance benefits averaged $1.76 (7.3 percent), retirement and savings averaged 88 cents (3.6 percent), and legally required benefits averaged $2.12 (8.7 percent) per hour worked.

In June 2005, average costs in private industry for retirement and savings benefits were 88 cents per hour worked, or 3.6 percent of total compensation. The average cost per hour worked for both defined benefit plans and defined contribution retirement plans was 44 cents (1.8 percent of total compensation). Defined benefit plans typically specify a benefit based on age, years of service, and earnings; defined contribution plans are usually based on employer contributions to individual employee accounts.

Among occupational groups, retirement and savings costs ranged from 18 cents per hour worked for service occupations to $1.75 for management, professional, and related occupations. Sales and office occupations averaged 55 cents; production, transportation, and material moving occupations, 86 cents; and natural resources, construction, and maintenance occupations, $1.35 per hour.

The proportion of total compensation represented by retirement and savings ranged from 1.5 percent for service workers to 4.9 percent for natural resources, construction, and maintenance workers.

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