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SURVEY OF MAJOR LABOUR COSTS


INTRODUCTION

The Survey of Major Labour Costs (MLC) has been conducted on an irregular basis since 1985–86, and was most recently conducted in respect of 2015-16. The survey produces statistics on the main costs incurred by businesses as a consequence of employing labour. Data from the survey are used by a wide range of users for labour market analysis. In particular, they are used by governments for employment, prices and income policy development, for monitoring changes in the cost of labour, and for wage determination purposes. In addition, the estimates are used within the ABS to benchmark major Australian National Accounts series.


SURVEY OUTPUT

Estimates are published in Labour Costs, Australia (cat. no. 6348.0). More detailed estimates may be available on request.

The population of interest is civilian employee jobs based in Australia, for which payments in relation to certain labour costs were made during the survey reference period (the financial year ending 30 June). The reference period for fringe benefits tax is for the 12 months ending 31 March. A number of key items are compiled from the survey based on various components of employer labour costs:

• employee earnings;
• superannuation;
• payroll tax;
• workers' compensation; and
• fringe benefits tax.

Earnings estimates from the survey are broader than, and are not directly comparable with, earnings estimates from the Survey of Average Weekly Earnings (AWE). For more details on the earnings definition in MLC, see the Employee Remuneration section.

A number of other labour costs are not covered by this survey. These include training costs, costs associated with employee welfare services, and recruitment costs. With the exception of training costs, these items are not considered to make a significant contribution to total labour costs. Training costs were collected in the Training Expenditure and Practices Survey, conducted for the financial year 2001–02, and in the earlier Training Expenditure Survey conducted for September quarters of 1989, 1990, 1993 and 1996. Costs covered in these former surveys are specifically for structured training provided by employers. For further information see Employer Training Expenditure and Practices, Australia (cat. no. 6362.0).

SCOPE

The scope of the survey is restricted to employing organisations in Australia. Public sector organisations operating in the Agriculture, Forestry and Fishing industry (Australian and New Zealand Standard Industrial Classification (ANZSIC) Division A) are included in the scope of this survey. Otherwise, the standard scope exclusions for ABS labour-related business surveys (outlined in the Methods Used in ABS Business Surveys section) apply to this survey.

SURVEY METHODOLOGY

Detailed information is obtained about labour costs from selected employers using an online electronic collection methodology.

Respondents who do not submit their completed questionnaire within a reasonable period of time after the survey reference date are followed up by mail and then telephoned if necessary.


SAMPLE DESIGN

A sample of employing businesses is drawn from the ABS Business Register using the process outlined in the Methods Used in ABS Business Surveys section. Employing units are stratified by:

• state or territory;
• sector – the public and private sectors are stratified separately;
• industry – industry stratification is based on ANZSIC division; and
• employment size – the ranges used vary between states and territories, sectors and industries.

RELIABILITY OF THE ESTIMATES

Estimates from the survey are subject to both sampling and non-sampling error. The relative standard errors of survey estimates are available in the publication.

The Bootstrap approach is used to calculate estimates of variance for this survey. The Bootstrap is a variance estimation method which relies on the use of replicate samples, essentially sampling from within the main sample. Each of these replicate samples is then used to calculate a replicate estimate and the variation in these replicate estimates is used to calculate the variance of a particular estimate.


DATA COMPARABILITY OVER TIME

In order to provide a high degree of consistency and comparability over time, changes to survey methods, survey concepts, data item definitions, and frequency of collection, are made as infrequently as possible. However, care should be taken in using data from this survey as a time series. The survey is designed to give an accurate 'snapshot' of data, rather than an ongoing series of observations over time. Key changes to the survey over time include:

2015–16

• Estimates published in 6348.0.
  

• Estimates published in 6348.0.
• Output classified on ANZSIC 2006 industry basis.
  

• Estimates published in 6348.0.55.001 for the first time.
• Employer superannuation costs excluded superannuation contributions made under an employee's salary sacrifice arrangement for the first time.
• Earnings estimates included, for the first time, the value of salary sacrificed.
• The derivation of earnings included the un-grossed value of fringe benefits, whereas the grossed up value of fringe benefits was used in 1996–97.
  

• Introduction of Live Respondent Mean imputation for the sampled sector.
• Change in reporting arrangements for superannuation by Commonwealth general government organisations.
• Introduction of Aggregate Ratio imputation for all units.

• Survey output reclassified on an ANZSIC industry basis.
• Collection methodology for superannuation coverage and collection of fringe benefits/fringe benefits tax commenced.

• Last year the survey was conducted on an annual basis.

• Annual survey commenced for this reference year.