6333.0 - Characteristics of Employment, Australia, August 2014 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/10/2015  First Issue
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EXPLANATORY NOTES


INTRODUCTION

1 The statistics in this publication were compiled from information collected in the Characteristics of Employment (COE) survey conducted throughout Australia in August 2014 as a supplement to the Australian Bureau of Statistics' (ABS) monthly Labour Force Survey (LFS). Respondents to the LFS who fell within the scope of the supplementary survey were asked further questions.

2 Information about survey design, scope, coverage and population benchmarks relevant to the monthly LFS, which also applies to supplementary surveys, can be found in the publication Labour Force, Australia (cat. no. 6202.0).


CONCEPTS, SOURCES AND METHODS

3 The conceptual frameworks used in the monthly LFS align closely with the standards and guidelines set out in Resolutions of the International Conference of Labour Statisticians. Descriptions of the underlying concepts and structure of Australia's labour force statistics, and the sources and methods used in compiling these estimates, are presented in Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001).

4 The conceptual framework for measures of mean and median earnings aligns closely with the standards and guidelines set out in the System of National Accounts 2008, and Resolutions of the International Conference of Labour Statisticians.


SCOPE

5 The scope of the LFS is restricted to people aged 15 years and over and excludes the following people:

  • members of the permanent defence forces;
  • certain diplomatic personnel of overseas governments, customarily excluded from the Census and estimated populations;
  • overseas residents in Australia; and
  • members of non-Australian defence forces (and their dependants).

6 Students at boarding schools, patients in hospitals, residents of homes (e.g. retirement homes, homes for people with disabilities), and inmates of prisons are excluded from all supplementary surveys.

7 This supplementary survey was conducted in both urban and rural areas in all states and territories, but excluded persons living in Aboriginal and Torres Strait Islander communities in very remote parts of Australia.

8 In addition to those already excluded from the LFS, contributing family workers, persons not in the labour force and unemployed persons were also excluded.

    COVERAGE

    9 The estimates in this publication relate to persons covered by the survey in August 2014. In the LFS, coverage rules are applied which aim to ensure that each person is associated with only one dwelling, and hence has only one chance of selection in the survey. See Labour Force, Australia (cat. no. 6202.0) for more details.


    SAMPLE SIZE

    10 Supplementary surveys are not always conducted on the full LFS sample. Since August 1994 the sample for supplementary surveys has been restricted to no more than seven-eighths of the LFS sample.

    11 This survey is fully based on the sample introduced after the 2011 Census of Population and Housing. For more information, see the Article in the May 2013 issue of Labour Force, Australia (cat. no. 6202.0).

    12 The initial sample for the August 2014 LFS consisted of 31,298 private dwellings and special dwelling units. Of the 24,834 private dwellings and special dwelling units that remained in the survey after sample loss (e.g. households selected in the survey which had no residents in scope for the LFS, vacant or derelict dwellings and dwellings under construction), approximately 24,672 or 91.2% were responding to the LFS, realising approximately 25,360 completed supplementary schedules.


    RELIABILITY OF THE ESTIMATES

    13 Estimates in this publication are subject to sampling and non-sampling errors:
    • Sampling error is the difference between the published estimate and the value that would have been produced if all dwellings had been included in the survey. For more information, see the Technical Note.
    • Non-sampling errors are inaccuracies that occur because of imperfections in reporting by respondents and interviewers, and errors made in coding and processing data. These inaccuracies may occur in any enumeration, whether it be a full count or a sample. Every effort is made to reduce the non-sampling error to a minimum by careful design of questionnaires, intensive training and effective processing procedures.


    SEASONALITY

    14 The estimates are based on information collected in the survey month (August) and, due to seasonality, may not be representative of other months of the year.


    CLASSIFICATIONS USED

    15 Country of birth data are classified according to the Standard Australian Classification of Countries (SACC), 2011 (cat. no. 1269.0).

    16 Occupation data are classified according to ANZSCO - Australian and New Zealand Standard Classification of Occupations, 2013, Version 1.2 (cat. no. 1220.0).

    17 Industry data are classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) (cat. no. 1292.0).


    NOTES ON ESTIMATES

    18 To minimise the risk of identifying individuals in aggregate statistics, a technique is used to randomly adjust cell values. This technique is called perturbation. Perturbation involves small random adjustment of the statistics and is considered the most satisfactory technique for avoiding the release of information that could identify individual survey respondents while maximising the range of information that can be released. These adjustments have a negligible impact on the underlying pattern of the statistics. After perturbation, a given published cell value will be consistent across all tables. However, adding up cell values to derive a total will not necessarily give the same result as published totals.

    19 Where information relating to earnings in both main job and/or second job was not provided by the respondent, values have been imputed. In August 2014, there were 3,407 cases where information relating to earnings in main job was not provided by the respondent and 105 cases where information relating to earnings in second job was not provided by the respondent. Where this was the only information missing from the respondent record, the value was imputed based on answers provided from another respondent with similar characteristics (referred to as the "donor"). Donor records were selected for imputation of earnings in main job by matching information on sex, age, state or territory of usual residence and selected labour force characteristics (full-time or part-time in main job, industry, occupation, hours worked in main job, owner manager status) of the person with missing information.

    20 Donor records were selected for imputation of earnings in second job by matching information on age, state or territory of usual residence, area of usual residence, owner manager status, hours worked in second job and frequency of pay in second job. Depending on which values were imputed, donors were chosen from the pool of individual records with complete information for the block of questions where the information was missing.

    Earnings

    21 Estimates relating to mean and median weekly earnings exclude owner managers of incorporated enterprises (OMIEs) who did not draw a wage or salary and employees who only received payment in kind.

    Leave entitlements

    22 Employees have been classified as 'With paid leave entitlements' if they were entitled to paid sick leave and/or paid holiday leave. In all other cases, employees have been classified as 'Without paid leave entitlements'.


    COMPARABILITY OF TIME SERIES

    23 The Labour Force Survey estimates and estimates from the supplementary surveys, are calculated in such a way as to sum to independent estimates of the civilian population aged 15 years and over (population benchmarks). These population benchmarks are based on Estimated Resident Population (ERP) data. Generally, revisions are made to population benchmarks for the LFS following the final rebasing of population estimates to the latest five-yearly Census of Population and Housing, or when the need arises. However, the estimates from the supplementary surveys are not normally revised to reflect the latest benchmarks.

    24 From January 2014, Labour Force Estimates have been compiled using population benchmarks based on the 2011 Census of Population and Housing. At the time of publication, this issue's estimates are comparable with the published labour force estimates for August 2014.

    25 Changes to the LFS population benchmarks impact primarily on the magnitude of the Labour Force Survey estimates (i.e. employment and unemployment) that are directly related to the underlying size of the population. For more details on population benchmarks, see the Explanatory Notes in Labour Force, Australia (cat. no. 6202.0), and for details about the revisions made, see the article in the January 2014 issue of Labour Force, Australia (cat. no. 6202.0) and the article in the November 2012 issue of Labour Force, Australia (cat. no. 6202.0).

    26 From August 2014 collection of earnings in second job was changed to match the collection of earnings in main job. Previously, earnings in second job was collected from respondents who were employees in their second job who actually worked some hours in their second job in the reference week. Earnings were reported for those hours actually worked in that job. From 2014, earnings in second job were collected from employees in their second job regardless of whether they worked in that job in the reference week. Earnings data and frequency of pay in that second job were subsequently collected. This change will result in a break in series of earnings in all jobs and earnings in second job.

    27 Caution should be exercised when comparing results from the 2014 COE to previous Employee Earnings, Benefits and Trade Union Membership surveys (EEBTUM) as the population Employees in COE is not directly comparable to the Employees population in EEBTUM. In EEBTUM "Employees" comprised both employees and OMIEs. In this publication time series presents the population groups on a consistent basis.

    28 Caution should be exercised when comparing results from the 2014 COE to previous Forms of Employment surveys (FOE) (2008–2013) as the population Employees in COE is not directly comparable to the Employees population in FOE.

    29 Prior to 2014, information about trade union membership was collected only of employees and owner managers or incorporated enterprises. From 2014 onwards, information on trade union membership is collected from all employed people. See Appendix: Status of employment and population concordance for more information.

    30 For information on the history of changes to EEBTUM, see the Explanatory Notes (cat. no. 6310.0).

    31 For information on the history of changes to FOE, see the Explanatory Notes (cat. no. 6359.0).

    Salary sacrifice

    32 The estimates of earnings in this publication are produced in accordance with the conceptual framework for measures of employee remuneration, as outlined in Information paper: Changes to ABS Measure of Employee Remuneration, Australia 2006 (cat. no. 6313.0).

    33 From 2007, as a result of a change in the concept of earnings being measured, employees and OMIEs were asked to include salary sacrifice when estimating their earnings. In previous years, there was no explicit reference to the treatment of salary sacrifice. It is probable that some employees were already including amounts of salary sacrifice in their estimates of earnings, depending upon how their pay was reported. This change has resulted in a break in series. Users need to exercise care when comparing the earnings of employees and OMIEs in this release with those prior to 2007.

    Imputation

    34 From 2014, additional information relating to the number of hours usually worked and the frequency of pay in a respondent's second job were added to the imputation process for second job earnings.

    35 From 2009, additional information relating to the number of hours that a respondent's last pay period covered in their main job was added to the imputation process for main job earnings.

    36 Aside from the changes listed above, the current imputation method has been used since the 2005 survey. A similar method of imputation was used for the 2004 survey. The differences between the 2004 and the current imputation method are that donors are matched, where possible at a finer level of detail; and second job earnings are imputed whereas in 2004 they were not.

    37 Prior to 2004, imputation was not used. Employees whose weekly earnings could not be determined were excluded from estimates of mean or median weekly earnings. Care should be taken when comparing earnings data from 2004 onwards with earnings data prior to 2004. To compare the change in methodology from 2003 to 2004 see paragraph 28 of the Explanatory Notes in the August 2004 Employee Earnings, Benefits and Trade Union Membership (cat. no. 6310.0).


    COMPARABILITY WITH MONTHLY LFS STATISTICS

    38 Due to differences in the scope and sample size of this supplementary survey and that of the monthly LFS, the estimation procedure may lead to some small variations between labour force estimates from this survey and those from the LFS.


    COMPARABILITY WITH EMPLOYER-BASED SURVEYS

    39 Caution should be exercised when comparing estimates of earnings in this release with estimates of earnings included in the biannual publication Average Weekly Earnings, Australia (cat. no. 6302.0) and two-yearly publication Employee, Earnings and Hours, Australia (cat. no. 6306.0). The data in both these publications are compiled from employer based surveys. There are important differences in the concepts, scope and methodology of these surveys resulting in different estimates of earnings from each survey.

    40 The survey of Average Weekly Earnings (AWE) collects information from employers who complete an online questionnaire with details of their employees' total gross earnings and their total number of employees. The survey of Employee, Earnings and Hours (EEH) collects information about weekly earnings of a sample of employees and their individual characteristics within the selected employer unit. Both AWE and EEH are completed by employers with information from their payroll. However, for COE and EEBTUM, respondents are either the employed person or another adult member of their household who responds on their behalf. Where earnings are not known exactly an estimate is reported. AWE and EEH exclude employees in the industries of Agriculture, forestry and fishing; and Private households employing staff whereas these are included in the COE and EEBTUM household surveys and may result in differences in earnings.

    41 Estimates of average weekly earnings from AWE excluded amounts salary sacrificed until May 2011, and since then, have been reported as Average Weekly Cash Earnings in the Average Weekly Earnings datacubes. In EEH, the salary sacrificed amounts have been included in the estimates of mean and median weekly earnings from 2006 onwards. From 2007, COE and EEBTUM have included amounts salary sacrificed in the estimates of mean and median weekly earnings.

    42 The methodology used in COE and EEBTUM may result in non-sampling error not evident in surveys of employers (and vice versa). This may account for some of the differences in the results compared to employer based surveys. More details about earnings statistics produced from these surveys is included in the analytical article Understanding earnings in Australia using ABS statistics (cat. no. 6105.0).


    PREVIOUS SURVEYS

    43 Similar surveys on weekly earnings have been conducted annually in August since 1975, except in 1991 when the survey was conducted in July, and in 1996 when the survey was not conducted.

    44 Prior to 1999, the EEBTUM publication was titled Weekly Earnings of Employees (Distribution), Australia (cat. no. 6310.0). The change in title reflects the inclusion of employment benefits and trade union membership data previously released in other publications.

    45 Results of previous surveys on employment benefits have been published in Weekly Earnings of Employees (Distribution), Australia, August 1997 (cat. no. 6310.0).

    46 Information on trade union membership was first collected in 1976, then biennially in its current format, from 1986 to 1992. From 1994, it was conducted annually (with only limited data available every second year). Results of previous surveys were published in Labour Force, Australia, December 1994, December 1995 (cat. no. 6203.0).

    47 Limited data on trade union membership have also been published in:

    NEXT SURVEY

    48 This survey was conducted in August 2015. More information on overwork, job flexibility, working patterns and locations of work is contained in this survey. Data on trade union membership was not collected in this survey.


    ACKNOWLEDGEMENT

    49 ABS surveys draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act, 1905.


    RELATED PUBLICATIONS

    50 Other ABS publications which may be of interest include:

    51 Current publications and other products released by the ABS are available from the Statistics Page on the ABS website. The ABS also issues a daily Release Advice on the website which details products to be released in the week ahead.