6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, 2013  
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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 registered or unregistered 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 negotiation process, and in research into various aspects of the labour market.


SURVEY OUTPUT

30.2 Estimates are published in Employee Earnings and Hours, Australia (cat. no. 6306.0). More detailed estimates are also available on request. Until 2008, preliminary estimates were published in 6305.0 and 6305.0.55.001.

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:

      Earnings of employees:
        • weekly total cash earnings; weekly ordinary time cash earnings; weekly overtime earnings;
        • average weekly total cash earnings; average weekly ordinary time cash earnings; average weekly overtime earnings;
        • average hourly total cash earnings; average hourly ordinary time cash earnings; average hourly overtime earnings.

      Hours paid for:
        • average weekly total hours paid for; average weekly ordinary time hours paid for; average weekly overtime hours paid for.

      How employees' pay is set (collected for the first time in 2000):
        • the number and cash earnings of employees paid by - award only; collective agreement (registered or unregistered); individual arrangement (registered or unregistered); and owner managers of incorporated enterprises;
        • jurisdiction of registered agreements.
30.4 Data can also be cross-classified by: state/territory; sector (public, private); rate of pay; full-time/part-time status; sex; managerial/non-managerial status; type of employee (permanent or fixed-term, or casual); occupation; industry; employer size.

30.5 Data are compiled according to the concepts and definitions outlined in Chapter 4 (Employment measures and classifications), Chapter 12 (Employee remuneration) and Chapter 13 (Industrial relations).


SCOPE

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

30.7 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

30.8 Detailed information is obtained about a sample of employees from each selected business, using internet based survey forms (eForms). Prior to the May 2012 survey, information was obtained using a mail-out/mail-back collection methodology.

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

30.10 Businesses that do not submit their eForm within a reasonable period of time after the survey reference date are followed up by mail and/or phone.


SAMPLE DESIGN


30.11 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 statistical 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). Each statistical unit is classified to an industry which reflects the predominant activity of the business. The collection and reporting units used in the survey usually correspond to the statistical 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.

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


FIRST STAGE SAMPLE SELECTION


30.13 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.

30.14 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.

30.15 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 less than 20 employees.


SECOND STAGE SAMPLE SELECTION


30.16 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 are not required to order their payroll in any particular way when selecting the sample.


SAMPLE SIZE AND ALLOCATION


30.17 For the first-stage sample, approximately 8,400 employer (selection) units are selected to yield a live sample of approximately 7,500 units.

30.18 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


30.19 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


30.20 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.

30.21 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.

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

30.23 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.

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


TIME SERIES ESTIMATES

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


RELIABILITY OF THE ESTIMATES

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

30.27 The Boot Strap method is 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

30.28 Caution should be exercised when comparing data between different years as EEH is not designed as a time series. Also, while changes to the survey are made as infrequently as possible, over time there have been changes to survey methods, survey concepts, data item definitions, and frequency of collection. Key changes have included:
    1974
    Annual survey commenced; first-stage sample frame comprised lists of employers subject to payroll tax and lists of government departments and hospitals.

    1981
    Survey frequency changed to biennial.

    1983
    First-stage sample frame changed to ABS Business Register.

    1986
    Survey frequency changed to annual.

    1993
    Payments from workplace and enterprise agreements included in 'Base pay' rather than 'Overaward and overagreement pay'.

    1995
    Sample redesign on an ANZSIC basis.

    1996
    Survey frequency changed to biennial.

    2000
    Questions 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.

    2002
    How employees' pay is set questions redeveloped.
    Changes made to employee type question (replaced 'temporary' with 'fixed-term').
    Question introduced on amounts 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.

    2004
    Introduction 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.

    2006
    Preliminary publication Employee Earnings and Hours, Australia, Preliminary (cat. no. 6305.0.55.001) was not released for 2006.
    Estimates of cash earnings now include amounts salary sacrificed (see cat. no. 6313.0). Estimates of cash earnings from May 2002 and May 2004 surveys reproduced on the new conceptual basis.
    Changes made to employee type question ('permanent' and 'fixed-term' separately collected).
    Occupation data is now classified according to Australian and New Zealand Standard Classification of Occupations (ANZSCO), First Edition (cat. no. 1220.0). Data classified to Australian Standard Classification of Occupations (ASCO), Second Edition (cat. no. 1220.0) is available on request.
    Confidentialised Unit Record File (CURF) (cat. no. 6306.0.55.001) produced.

    2008
    Industry data classified according to Australian and New Zealand Standard Industrial Classification, 2006 (cat. no. 1292.0).
    Data classified to Australian and New Zealand Standard Industrial Classification, 1993 (cat. no. 1292.0) available on request.
    Data on methods of setting pay presented on new jurisdictional basis to reflect the new workplace relations environment.
    Survey run in August, and the reference period for the survey is August 2008.
    Preliminary estimates published in Employee Earnings and Hours, Preliminary, August 2008 (cat. no. 6305.0.55.001).

    2010
    'Working proprietor of an incorporated business' sub-category of the methods of setting pay data item changed to 'Owner manager of incorporated enterprise'.
    Survey run in May, and the reference period for the survey is May 2010.
    Confidentialised Unit Record File (CURF) (cat. no. 6306.0.55.001) produced.
    Release of additional data cubes.
    Information about the proportions of employees covered by national and state jurisdictions for pay setting are no longer published but may be available in the Confidentialised Unit Record File (CURF).
    From 2010, additional estimates of numbers of employees published.

    2012
    Introduction of internet based survey form (eForm) to replace the mail-out/mail-back (paper) questionnaire.

    2014
    Adult/Junior employee item modified to the new 'Rate of pay' with the additional categories: apprentice or trainee rate; and disability rate.
    Actual age of employee information collected. Previously age information was collected only as 'under 18 years', '18 years and under 21 years' and '21 years and over'.
    Hours paid for data requested for all employees, including Managerial employees. Previously, hours paid for collected for non-managerial employees only. Estimates of hours paid for and hourly earnings produced for all employees with a link between earnings and hours.



FURTHER INFORMATION


30.29 For further details contact the Labour Market Statistics Section, on Canberra (02) 6252 7206 or email labour.statistics@abs.gov.au.

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