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6306.0 - Employee Earnings and Hours, Australia, May 2010 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/01/2011   
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EXPLANATORY NOTES


INTRODUCTION

1 This publication contains estimates from the 2010 Survey of Employee Earnings and Hours. The survey was conducted in respect of May 2010 and collected information from a sample of employers about the earnings, hours paid for, and selected characteristics of their employees.

2 The survey is designed to provide detailed statistics on the composition and distribution of earnings and hours paid for, of employees. Information is collected about the characteristics of employers, such as industry and sector, and their employees, such as occupation, type of employee, and method of setting pay. This information is used to provide comprehensive statistics about earnings and hours paid for, for various groups of employees, for example, classified by industry, occupation and pay setting method.


CONCEPTS, SOURCES AND METHODS

3 Descriptions of the underlying concepts of employee earnings, hours paid for and methods of setting pay, 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) which is available on the ABS web site
<http://www.abs.gov.au>.

4 Estimates of employee earnings produced from the Survey of Employee Earnings and Hours and presented in this publication are based on the Australian conceptual framework for measures of employee remuneration. From 2006, the measure of employee earnings for estimates produced from the survey is regular wages and salaries in cash (including amounts salary sacrificed), that is, cash earnings.


SCOPE AND COVERAGE

5 The survey covered all employing organisations in Australia (public and private sectors) except:

  • enterprises primarily engaged in agriculture, forestry and fishing;
  • private households employing staff; and
  • foreign embassies, consulates, etc.

6 The employees of employers covered in the survey are in scope if they received pay for the reference period, except:
  • members of the Australian permanent defence forces;
  • employees based outside Australia; and
  • employees on workers’ compensation who are not paid through the payroll.


SURVEY METHODOLOGY AND DESIGN

7 The Survey of Employee Earnings and Hours 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) (see paragraphs 9-16). Each statistical unit is classified to an industry which reflects the predominant activity of the business. The statistical units are stratified by state/territory, sector (private/public), industry, and employment size. Within each stratum statistical units are selected with equal probability. A sample of approximately 9,000 employer (selection) units was selected to ensure adequate industry and state/territory representation.

8 In the second stage the selected employers are asked to select a random sample of employees from their payrolls using instructions provided by the ABS. Data for approximately 60,000 employees contributed to the results in this publication.


STATISTICAL UNITS DEFINED ON THE ABS BUSINESS REGISTER

9 The ABS uses an economic statistics units model on the ABS Business Register to describe the characteristics of businesses (and other organisations, including government departments), and the structural relationships between related businesses. The units model is also used to group related businesses into relatively homogeneous components that can provide data to the ABS.

10 In mid 2002, to better use the information available as a result of The New Tax System, the ABS changed its economic statistics units model. The new units model allocates businesses to one of two sub-populations. The vast majority of businesses are in what is called the ATO Maintained Population, while the remaining businesses are in the ABS Maintained Population. Together, these two sub-populations make up the ABS Business Register population.


ATO MAINTAINED POPULATION

11 Most businesses and organisations in Australia need to obtain an Australian Business Number (ABN), and are then included on the ATO Australian Business Register. Most of these businesses have simple structures, in which case the unit registered for an ABN will satisfy ABS statistical requirements. For these businesses, the ABS has aligned its statistical units structure with the ABN unit. The businesses with simple structures constitute the ATO Maintained Population, and the ABN unit is used for these businesses as the statistical unit for all economic collections.


ABS MAINTAINED POPULATION

12 For the population of businesses where the ABN unit is not suitable for ABS statistical requirements, the ABS maintains its own units structure through direct contact with the business. These businesses constitute the ABS Maintained Population. This population consists typically of large, complex and diverse businesses. The new statistical units model described below is used for these businesses.

13 Enterprise Group: This is a unit covering all the operations in Australia of one or more legal entities under common ownership and/or control. It covers all the operations in Australia of legal entities which are related in terms of the current Corporations Law (as amended by the Corporations Legislation Amendment Act 1991), including legal entities such as companies, trusts, and partnerships. Majority ownership is not required for control to be exercised.

14 Enterprise: The enterprise is an institutional unit comprising (i) a single legal entity or business entity, or (ii) more than one legal entity or business entity within the same Enterprise Group and in the same institutional sub-sector (i.e. they are all classified to a single Standard Institutional Sector Classification of Australia (SISCA) sub-sector).

15 Type of Activity Unit (TAU): The TAU comprises one or more business entities, sub-entities or branches of a business entity within an Enterprise Group that can report production and employment data for similar economic activities. When a minimum set of data items is available, a TAU is created which covers all the operations within an industry sub-division (and the TAU is classified to the relevant sub-division of ANZSIC). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry sub-division.

16 For more information on the impacts of the introduction of the new economic statistics units model, refer to Information Paper: Improvements in ABS Economic Statistics [Arising from The New Tax System] (cat. no. 1372.0).


INDUSTRY CLASSIFICATION

17 Each statistical unit is classified to an industry which reflects the primary activity of the organisation in the state or territory. Prior to 2008, data in previous publications of this series issued since 1994 are classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 1993. This classification has since been replaced by the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat. no. 1292.0). The 2006 edition of ANZSIC was developed to provide a more contemporary industrial classification system taking into account issues such as changes in the structure and composition of the economy, changing user demands and compatibility with major international classification standards.

18 Employees selected in the Survey of Employee Earnings and Hours are classified to the industry of the organisation in which they are employed.


OCCUPATION CLASSIFICATION

19 Each employee in the survey is classified to an occupation based on their job title and duties. Since May 2006, the classification used in this publication is the Australian and New Zealand Standard Classification of Occupations (ANZSCO), First Edition (cat. no. 1220.0). Data in previous publications of this series issued since 1996 are based on the Australian Standard Classification of Occupations (ASCO), Second Edition.


MANAGERIAL STATUS

20 Employees have been classified as managerial if they have strategic responsibilities in the conduct or operations of the organisation and/or were in charge of a significant number of employees. These employees usually did not have an entitlement to paid overtime. All other employees have been classified as non-managerial.

21 Care should be taken when comparing survey estimates based on ANZSCO groups with estimates based on the managerial status of employees. Estimates for employees with managerial status include employees classified to ANZSCO categories other than the ANZSCO major group Managers; e.g. employees classified as Professionals according to ANZSCO may be categorised by employers as having managerial status. Conversely, tables in this publication which contain estimates for non-managerial employees (as defined by employers) include some employees classified to the ANZSCO major group Managers.


METHODS OF SETTING PAY

22 Data on how employees' pay was set in the survey reference period have been collected in the survey since May 2000. Since May 2000, data have also been collected on whether agreements (individual or collective) were certified, approved or registered with an industrial tribunal or authority.

23 From May 2002, each survey cycle has collected data on whether the main part of employees' pay was set by individual agreement, collective agreement or award. The May 2000 survey collected data on whether all or any part of employees' pay was set by an individual agreement, collective agreement, award, or a combination of these.

24 Estimates of employees covered by the various pay setting methods, and their associated pay outcomes, have been compiled based on the workplace relations environment following the introduction of the Fair Work Act 2009 and the subsequent introduction of the Fair Work (State Referral and Consequential and Other Amendments) Act, which allowed for the extension of the Fair Work Act to states that refer workplace relations related matters to the Commonwealth. From 1 January 2010, private sector employers in New South Wales, Queensland, South Australia and Tasmania are covered by the national system. Data in previous publications of this series issued since 2000 are based on the workplace relations environment prior to the introduction of this legislation. The Fair Work system replaces the Workplace Relations Amendment (Work Choices) Act 2005 that was in place for the August 2008 Survey of Employee Earnings and Hours.

25 Key elements of the Fair Work system include:
  • a legislated safety net of 10 National Employment Standards;
  • new modern awards; and
  • revised enterprise bargaining arrangements, including the cessation of registered individual agreements.

26 Under the Fair Work system, the majority of employees come under the federal workplace relations system. The following employers are covered by the national system:
  • constitutional corporations (including a financial or trading corporation - generally Pty Ltd or Ltd);
  • the Commonwealth and Commonwealth authorities;
  • employers who employ flight crews, maritime employees or waterside workers;
  • employers in the Australian Capital Territory and Northern Territory;
  • most Victorian employers; and
  • private sector employees in New South Wales, Queensland, South Australia and Tasmania.

27 The following employers are generally not covered by the national system:
  • state government public sector employers;
  • Australian corporations whose main activity is not trading or financial; and
  • sole traders and partnerships in Western Australia.

28 Information about the proportions of employees covered by national and state jurisdictions for pay setting are no longer published but can be provided on request.


EMPLOYEE ESTIMATES

29 From May 2010, estimates of numbers of employees by method of setting pay are presented in this survey publication, to add context around other estimates by method of setting pay. Care should be taken in the interpretation and use of such estimates, as the Survey of Employee Earnings and Hours is not designed specifically to produce estimates of numbers of employees. Consideration should be given to the level of variance of the estimates of numbers of employees, which are available from the standard error tables in the electronic data release accompanying this publication. Users are directed to Labour Force, Australia (cat. no. 6202.0) as the primary source for official ABS estimates of employment. Caution should be exercised when comparing estimates of numbers of employees from the Survey of Employee Earnings and Hours with those published in Labour Force, Australia (cat. no. 6202.0) as the two collections use different sample design and survey methodologies. For more information see paragraph 30 of the Explanatory Notes.


COMPARABILITY OF RESULTS

30 Caution should be exercised when comparing estimates of numbers of employees from the Survey of Employee Earnings and Hours with those published monthly in Labour Force, Australia (cat. no. 6202.0) as there are a number of differences between the two collections. The Survey of Employee Earnings and Hours is a business survey that collects information from a sample of employers about their employees, whereas the Labour Force Survey is a household survey that collects information from the occupants of selected dwellings. The two collections use different sample design and survey methodologies and there are differences in scope and coverage. Users are directed to Labour Force, Australia (cat. no. 6202.0) as the primary source for official ABS estimates of employment. Detailed information about the concepts, sources and methods of the Survey of Employee Earnings and Hours and Labour Force Survey can be found in Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001).

31 From May 2006, estimates of employee earnings from the Survey of Employee Earnings and Hours have been produced on a cash basis, that is, inclusive of amounts salary sacrificed. This differs from estimates provided in previous publications of this series, which excluded amounts salary sacrificed by employees. Estimates from the May 2004 and May 2002 surveys have also been reproduced on the new conceptual basis, and broad level estimates for these years were included in the electronic data release accompanying the May 2006 publication.

32 Care should be taken when comparing estimates of average weekly earnings from the Survey of Employee Earnings and Hours with those published quarterly in Average Weekly Earnings, Australia (cat. no. 6302.0). Estimates of average weekly earnings in that publication continue to be compiled on the previous conceptual basis (i.e. exclusive of amounts salary sacrificed). Additionally, the two collections use different sample design and survey methodologies. The Survey of Average Weekly Earnings collects information relating to the total gross earnings and the total number of employees of employer units selected in the survey. The average weekly earnings measures are derived by dividing total gross earnings by the number of employees. The Survey of Employee Earnings and Hours collects information about weekly earnings of a sample of employees within the employer units selected.


RELIABILITY OF ESTIMATES

33 Estimates are subject to sampling and non-sampling errors. For information on the reliability of estimates see the Technical Note.


RELATED PUBLICATIONS

34 Users may also wish to refer to the following publications:
  • Australian Labour Market Statistics (cat. no. 6105.0) - issued quarterly;
  • Average Weekly Earnings, Australia (cat. no. 6302.0) - issued quarterly;
  • Employee Earnings, Benefits and Trade Union Membership, Australia (cat. no. 6310.0) - issued annually;
  • Information Paper: Changes to ABS Measures of Employee Remuneration (cat. no. 6313.0) - issued 14 Nov 2006;
  • Labour Force, Australia (cat. no. 6202.0) - issued monthly;
  • Labour Price Index, Australia (cat. no. 6345.0) - issued quarterly;
  • Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001); and
  • Employment and Earnings, Public Sector, Australia (cat. no. 6248.0.55.002) - issued annually.


ROUNDING

35 Estimates of earnings shown in the tables and data cubes are rounded to the nearest 10 cents and those of average weekly hours paid for are rounded to the first decimal place.

36 Where figures have been rounded, discrepancies may occur between sums of the component items and totals.


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