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6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, Apr 2007  
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Contents >> Methods >> Business Collections >> Chapter 30. Survey of Employee Earnings and Hours

Labour Statistics: Concepts, Sources and Methods was originally released in 2001 in both electronic and paper versions (cat. no. 6102.0). The paper publication will not be rereleased. However, the web version (cat. no. 6102.0.55.001) is being updated on an ongoing basis. This chapter was updated on 20 April, 2005.


Chapter 30. Survey of Employee Earnings and Hours

INTRODUCTION

30.1 The Survey of Employee Earnings and Hours has been conducted since 1974. It is currently conducted biennially. The survey produces estimates of average weekly earnings and the distribution of weekly earnings and hours paid for, of employees. It also produces estimates of the proportion, and average weekly total earnings, of employees whose pay is set by award only, by collective agreement and by individual arrangement.
Estimates from the survey are used by Commonwealth and State government departments, employer associations, trade unions and academic researchers. They are used in developing and reviewing wages and labour market policies, in the wage negotiating process, and in research into various aspects of the labour market.



SURVEY OUTPUT


30.2 Estimates are published initially in
Employee Earnings and Hours, Australia, Preliminary (cat. no. 6305.0.55.001) and later in Employee Earnings and Hours, Australia (cat. no. 6306.0). More detailed estimates are also available on request.

30.3 A number of series are compiled from the survey based on the distribution and composition of earnings and hours paid for, and the methods by which pay is set. These include:

    • Distribution of all employees by: weekly total earnings; weekly ordinary-time earnings; and weekly overtime earnings;
    • Composition of average weekly earnings: average weekly total earnings; average weekly ordinary-time earnings; and average weekly overtime earnings;
    • Distribution of non-managerial employees by: weekly total hours paid for; weekly ordinary-time hours paid for; and weekly overtime hours paid for;
    • Average hourly earnings (not available for managerial employees): average hourly ordinary-time earnings; and average hourly total earnings;
    • Composition of average weekly hours paid for (not available for managerial employees): average weekly total hours paid for; average weekly ordinary-time hours paid for; and average weekly overtime hours paid for;
    • How employees' pay is set (collected for the first time in 2000): award only; collective agreement; and individual arrangement.

30.4 Data can also be cross-classified by: state/territory; sector (public, private); level of government (Commonwealth, State, Local); industry (4 digit ANZSIC); employer size; sex; age (under 18 years, 18 to under 21 years, 21 years and over); full-time/part-time; adult/junior; managerial/non-managerial; type of employee (permanent or fixed-term, casual); status of employee (working proprietor, managerial/executive, other employee); and occupation (4 digit ASCO).


30.5 Data on how employees' pay was set in the reference period have been collected in the survey since May 2000. Data are available on: number of, and average weekly total earnings of, employees whose pay is set by each pay setting method.

30.6 Data are compiled according to the concepts and definitions outlined in
Chapter 4 (employees), Chapter 12 (earnings) and Chapter 13 (pay setting methods).


SCOPE


30.7 For the first-stage sample of employing businesses, the standard scope exclusions for ABS labour-related business surveys (outlined in
Chapter 25) apply to this survey.

30.8 The scope of the second-stage sample is restricted to civilian employees based in Australia who received payments during the survey reference period. Self-employed persons (such as proprietors/partners of unincorporated businesses), employees who did not receive pay during the reference period (such as persons on unpaid leave), employees based outside Australia, and members of the Australian permanent defence forces are not in scope of the survey.



SURVEY METHODOLOGY


30.9 Detailed information is obtained about a sample of employees from each selected organisation using a mail-out/mail-back collection methodology.


30.10 The survey reference period is the last pay period ending on or before the third Friday in May of the survey year.


30.11 Businesses that do not mail back their completed questionnaire within a reasonable period of time after the survey reference date are followed up by mail and then phone if necessary.



SAMPLE DESIGN


30.12 The survey uses a two-stage sample selection approach. The first stage involves selecting a probability sample of employer units from the ABS Business Register. The sampling unit for the first stage comprises all activities of an employer in a particular state or territory based on the Australian Business Number (ABN) unit or Type of Activity Unit (TAU). The collection and reporting units used in the survey usually correspond to the sampling unit. However, where the ABN/TAU unit is unable to provide information required for the survey, it may be split into a number of 'reporting units'. For further information on statistical units used in ABS business surveys refer to
Chapter 25.

30.13 In the second stage, businesses selected in the first stage are asked to select a sample of employees from their payrolls using instructions provided by the ABS.


FIRST STAGE SAMPLE SELECTION


30.14 A probability sample of employing businesses (ABN/TAU units) is drawn from the ABS Business Register using the process outlined in
Chapter 25. Variables used to stratify the survey frame at stage one of the sample selection are:
    • state or territory;
    • sector - the public and private sectors are stratified separately;
    • industry - within the private sector, industry stratification is by ANZSIC division; within the public sector ANZSIC divisions are aggregated to form four broad industry groupings; and
    • employment size - the ranges used vary between states and territories, sectors and industries.

30.15 Strata on the survey frame that are completely enumerated include those containing selection units with benchmark employment greater than a set cut-off (this cut-off will vary for different states/territories) and strata with a very small number of selection units in the population.


30.16 In addition to constraints outlined in
Chapter 25, sample selection is constrained by the need to minimise overlap with the quarterly Survey of Average Weekly Earnings, for businesses with more than 20 employees.


SECOND STAGE SAMPLE SELECTION


30.17 Second-stage sampling units (employees) are selected using systematic sampling within selected first-stage units. A random start and a skip are provided to each selected business for use in selecting the second-stage sample from its payroll(s). Businesses with an unknown employment size are given a skip of one. Businesses are not required to order their payroll in any particular way when selecting the sample.



SAMPLE SIZE AND ALLOCATION


30.18 For the first-stage sample, approximately 9,000 employer units are selected to yield a live sample of approximately 6,800 units
.

30.19 For the second-stage sample, approximately 55,000 employees contribute to the estimates. The maximum number of employees for any reporting unit is 40.



SAMPLE RESELECTION


30.20 The ABS reselects the sample for the Survey of Employee Earnings and Hours each time it is conducted. At the same time the overall design of the sample is examined to ensure that it remains efficient.



ESTIMATION


30.21 The estimation process occurs in two stages. In the first stage, number raised estimation is used to estimate the number of employees in each business. In the second stage, number raised estimation is again used to estimate the total number of businesses, and therefore employees, in the target population.


30.22 In the sampled strata, the Live Respondent Mean method is used to impute for non-responding businesses.
In the completely enumerated strata a ratio imputation model is used.

30.23 Survey outliers are handled using the 'surprise outlier' technique.


30.24 Business Provisions were introduced in the 2000 survey whereby adjustments are made to survey estimates to allow for births and deaths of businesses that have occurred up to the end of the survey reference period but which are not reflected on the survey frame.


30.25 For further information on estimation methods used in ABS Business Surveys, refer to
Chapter 25.


TIME SERIES ESTIMATES


30.26 Seasonally adjusted and trend estimates are not produced for this survey.



RELIABILITY OF THE ESTIMATES


30.27 Estimates from the survey are subject to both sampling and non-sampling error. The standard errors of survey estimates are published in both
Employee Earnings and Hours, Australia, Preliminary (cat. no. 6305.0.55.001) and Employee Earnings and Hours, Australia (cat. no. 6306.0).

30.28 Both the Ultimate Cluster Variance (UCV) technique and the grouped jack-knife method are used to calculate estimates of variance for this survey. For further information on variance estimation techniques, or on sampling and non-sampling error, refer to
Chapter 17.


DATA COMPARABILITY OVER TIME


30.29 Although many estimates from previous years or collection cycles are produced on a consistent basis, care should be taken in using data from this survey on a time series basis. The survey is designed to give an accurate 'snapshot' of data rather than an ongoing series of observations over time. Hence the survey methodology and sample design are not specifically set up to provide time series data, i.e. the sample is not set up to have the same employee jobs in it for more than one cycle. Nevertheless, average weekly earnings and hours paid for data at aggregate levels are compiled in a consistent manner over time, although successive estimates would not be strongly correlated because of low sample overlap.


30.30 The following changes have been made to survey methods, survey concepts, data item definitions, and frequency of collection.
1974Annual survey commenced; first-stage sample frame comprised lists of employers subject to payroll tax and lists of government departments and hospitals.
.
1981Survey frequency changed to biennial.
.
1983First-stage sample frame changed to ABS Business Register.
.
1986Survey frequency changed to annual.
.
1993Payments from workplace and enterprise agreements included in 'Base pay' rather than 'Overaward and overagreement pay'.
1995Sample redesign on an ANZSIC basis.
.
1996Biennial survey recommenced replacing annual survey.
2000Questions introduced on how employees' pay is set. Live Respondent Mean imputation method introduced for the sampled strata and ratio imputation method introduced for the completely enumerated strata. Business Provision adjustments introduced. Second-stage sample reduced significantly. 'Overaward and overagreement pay' not collected separately but included in 'Base pay'. Ceased collection of 'Apprentice/trainee' in status of employee.
2002How employees' pay is set questions redeveloped. Changes made to employee type question (replaced 'Temporary' with 'Fixed-term'). Question introduced on amount employee salary sacrificed. Sample re-designed to minimise overlap with the Survey of Average Weekly Earnings for businesses with less than 20 employees. Ceased collection of 'Supervisor' in status of employee.
2004Introduction of new statistical units model. Changes made to employee type question (combined 'Permanent' and 'Fixed-term'). Base pay, taxable allowances and payment by measured result no longer collected separately. Introduction of grouped jack-knife method for calculation of variance estimates. Working proprietors of incorporated businesses separated from other employees with individual arrangements in method of setting pay classification.


FURTHER INFORMATION

30.31 For further details contact the Labour Market Statistics Section, on Canberra (02) 6252 7206.



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