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February 10, 2003
Benefits Eat Up More Than One-Third of Payroll
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loyee benefits comprised more than one-third of company payroll costs in 2001, up slightly from the previous year, according to a survey conducted by the U.S. Chamber of Commerce.

The survey of 400 companies also revealed that medical payments were the most expensive and most common benefits offered.

"The percentage of benefits employees received in 2001 increased despite a slow economic recovery," said Bruce Josten, Chamber executive vice president. "The increase in benefits shows that employers have continued to make benefits a priority and recognize the importance of benefits in retaining employees in their companies."

Benefit costs averaged 39 percent of total payroll costs among employers surveyed, a 4 percent increase from the previous year (37.5 percent). The most common benefits offered by employers include health insurance, paid vacation, holiday benefits, and retirement and life insurance benefits.

In addition, medical benefits accounted for 11 percent of total gross payout, the largest share of employee benefit costs. Compensation for time off followed closely as the second-largest share of benefits cost to employers, averaging just over ten percent of payroll costs, followed by retirement and savings plan shares, which accounted for an average of eight percent of payroll.

The Chamber reports that it has conducted such studies, which are widely used for benchmarking and documenting employee benefit costs, for more than 50 years.

The Chamber has also reiterated its stance against adding new federal mandates to health care plans, citing years of double-digit health care cost increases.

"With health care costs soaring, mandating new benefits will cause some employers to drop health care coverage," said Bruce Josten, Chamber executive vice president. "Congress should concentrate on making health care coverage more affordable and accessible for working families, not pricing it out of reach."

Employers voluntarily provide coverage to 177 million workers, retirees and their families, according to the Chamber, which contends that lawmakers should focus on expanding coverage to more Americans, "rather than enriching the benefits of those already covered."

"Recent Census Bureau reports have shown the number of uninsured Americans has increased, following two years of steady declines," said Josten. "Most of the newly uninsured are people working for small businesses, which have the hardest time finding and affording coverage for workers."


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