ACCOUNTING FOR EMPLOYEE BENEFITS:

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ACCOUNTING FOR
EMPLOYEE BENEFITS Issues
of Measurement, Valuation and Social
Equivalencies Neil Gilbert School of Social
Welfare University of California
Berkeley European Measures of Income, Poverty,
and Social Exclusion Recent Developments and
Lessons for U.S. Poverty Measurement (Washington
D.C. Nov. 4, 2009)
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Employee Remuneration Package BLS Categories
Hourly Compensation Costs

• Hourly Direct Pay
• Pay for Time Worked
• Basic wages
• Piece rate
• Overtime premiums
• Shift differentials
• Bonuses and premiums paid regularly
• Cost-of-living adjustments
• Other Direct Pay
• Pay for time not worked (vacations, holidays,
  and other leave, except sick leave)
• Seasonal and irregular bonuses
• Social allowances
• Pay in kind

• Employer Social Insurance
  Expenditures (both legally required
  and contractual) and Other Labor Taxes
• Retirement and disability pensions Health
  insurance
• Income guarantee insurance and sick leave
• Life and accident insurance
• Occupational injury and illness
  compensation
• Unemployment insurance
• Family allowances
• Other social insurance expenditures

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How to Value Employee Benefits?

• Costs to Employer
• Market Value
• Low-end Standard Value
• Value to Employee

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Table 2 Employee
Benefits as of hourly compensation costs for
production workers in manufacturing 1975-2006
1975 1980 1985 1990 1995 2000 2006
United States 23.6 25.8 26 27.2 28.1 27.1 29.5
Austria 46 47.7 49.7 49.9 49.4 48.6 48.5
Denmark 14.9 16.5 17.7 16.3 21.4 26.1 28
Finland 28.2 32.7 33.7 38.2 38.8 37.6 40.6
France 40 41.5 44.7 46.3 45.7 45.3 44.3
Germany ---- ------ ------ ---- 43.6 42.2 42.1
Netherlands 40.9 42.3 42.6 42.5 42.6 40.3 41.8
Norway 28.3 30.7 31.3 31.4 29.2 29.8 32.9
Spain 48.1 44.6 43.8 46.2 47.3 44.1 45.5
Sweden 31 38.1 40.5 40.8 39.7 41.6 43.5
U. K. 21.1 27.9 26.2 25.8 26.2 31.1 30.3
Employee benefits include the employers costs
of all compensation minus pay for time worked
Source Calculated from BLS International
Comparisons of Compensation Costs Table 13
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Table 3. Primary Categories of Employee
Benefits
2006 Employee Benefits for Production Workers Total Other Direct Social insurance Benefits Pay and related costs
United States 29.5 7.6 21.9
Austria 48.5 21.5 27.0
Denmark 28 17.6 10.4
Finland 40.6 19.6 21.0
France 44.3 12.2 32.1
Germany 42.1 19.1 23.0
Netherlands 41.8 19.4 22.4
Norway 32.9 12.9 20.0
Spain 45.5 19.9 25.6
Sweden 43.5 10.4 33.1
U. K. 30.3 9.0 21.3

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Toward a more comprehensive accounting

• Resolve conceptual and methodological issues
  about what to count and how to value benefits
• Incorporate monetary value of untaxed employee
  benefits into income measures
• Address the treatment of functionally equivalent
  social benefits
• What is the value of leisure time?