prove helpful to the Committee. The enclosed article reprinted from the Monthly Labor Review (Reprint No. 2288) summarizes some of the information (but not that on employer contributions) contained in the bulletin. I am also enclosing a copy of our release on union scales in the building trades for the fourth quarter of 1958. This release shows employer contributions to pension funds that have been established in some areas for the crafts covered by the study. Since it may prove of use to the Committee, I should like to call your attention to a report issued biennially by the U. S. Chamber of Commerce on employer expenditures on fringe benefits, including pensions. I am also enclosing a copy of the most recent study in this series--Fringe Benefits, 1957. Problems in Measurement of Expenditures on Selected Items of Supplementary Employee Remuneration EXCERPT 5. Selected Items of Supplementary Remuneration (IV). —The items of supplementary remuneration selected for study were: Paid vacations Paid sick leave Premium pay for overtime-daily, weekly, Pension plans Insurance, health, and welfare plans Legally required payments-Old Age and 3 The payment of time and one-half for work in excess of 40 hours in the workweek is required by the Fair Labor Standards Act for workers engaged in interstate commerce or in the production of goods for interstate commerce. The Public Contracts Act, which applies to work on Government contracts in excess of $10,000, also calls for time and one-half for hours in excess of 8 per day. Thus, weekly overtime pay, and where applicable, daily overtime pay, may warrant consideration as "legally required payments. "However, collective bargaining agreements and company personnel practice have modified the definition of 40 hours of work as expressed in FLSA by substantially liberalizing the definition of "hours worked" for purposes of qualifying for overtime payments. For example, holidays and excused leave are widely counted as time worked for overtime pay purposes. Moreover, the practice of paying premium rates for all hours worked on Saturdays and Sundays, regardless of the number worked during the week, is becoming more prevalent. Assuming that it is desirable to account for the "legally required" portion of overtime pay, it would be necessary, but virtually impossible in a survey of this nature, to separate from the variety of overtime pay practices in American industry that portion which is based strictly on Govern ment regulations. Obviously, this is a restricted list. Under the assumption that the selection of items would have to be limited so as not to overburden the employer respondents, these items were selected because they are among the most common supplementary remuneration items; they account for a large part of total supplementary expenditures, however such a total is defined; and, with the exception of legally required payments, they are subject to collective bargaining. The Bureau's wage and industrial relations studies have for some time covered these items in terms of company and union policies; hence, it seemed logical to venture into the field of expenditure study in terms of these practices. tures. sur Some private surveys have utilized a longer list or have relied upon the employer to account for all supplementary expenditures, as he would define them; some, including the surveys of the Chamber of Commerce of the United States, either have omitted premium pay of all types from the scope of the practices studied, or have presented premium pay expenditures apart from other expendiSince the term "fringe benefits" has been used in other veys and might be applied to this study because of the convenience of that expression, it is important to emphasize that in the selection of these items the Bureau did not intend to imply that they should be considered as "fringe benefits" or even as "benefits" to workers. For this study, the items selected represent types of company expenditures going to workers, or paid on their behalf, which would not be accounted for in straight-time wage rates. The selected items presented no unusual problems of definition, except for the overlap between holiday pay and premium pay for holiday work. Since it was necessary to separate expenditures incurred through the recognition of paid holidays and those resulting from work on paid holidays, it was also necessary to define holiday premium pay expenditures as the amount paid in excess of double time (see instructions). For insurance, health, and welfare plans, net rather than gross expenditures were requested (see instructions). For this category and for pensions, costs incurred by the establishment in the administration of these plans were excluded, partly because of the difficulty of obtaining information (this administrative work is frequently tied in with other personnel functions) and partly because other practices studied also entail administrative costs which are not accounted for in the expenditure figures requested. A number of minor classification problems arising from the emphasis on expenditures for selected items rather than for all supplements combined were ignored in a choice between attaining a higher degree of precision in definition and further complication of the questionnaire. This was the case in such instances of overlapping 4 It should be noted that the terms "fringe" and "benefits" do not appear in the questionnaire and instructions. expenditure classifications as shift premiums in vacation and holiday pay and overtime on holidays, and in problems peculiar to establishments on continuous operations. 6. Measures to be Computed. For each of the items of supplementary remuneration covered, the following computations were planned for each establishment: For purposes of analysis, certain additional computations, based on the payroll and plant practice data requested, were planned. These included: Average vacation per employee, average vacation per employee receiving paid vacation, shift premium hours as a percent of total payroll hours, and gross average hourly earnings. 7. Estimating Expenditures.—In a departure from usual Bureau practice, the respondents, in the absence of actual records, were requested to estimate or calculate expenditures for production and related workers and to indicate the basis upon which these estimates were made. This was done for two reasons: (1) To find out how companies estimated expenditures in the absence of expenditure records, and (2) to be able to identify and to evaluate the data which were estimated. Undoubtedly, this device increased the response to the survey; many companies, however, remained reluctant to attempt such estimation. The Sample Design The decision to limit the study to manufacturing industries, and to cover all manufacturing industries (rather than one), was made to obtain the maximum information concerning methodological problems for the minimum investment of resources. The inclusion of nonmanufacturing industries would have spread the survey too thinly and would have made it necessary to consider a multitude of problems peculiar to such industries as retail trade and construction. On the other hand, limiting the survey to one manufacturing industry, or to a segment of an industry, while possibly producing more conclusive data, would leave too large an unexplored area. The sample of establishments to which the questionnaire was sent was selected to represent all size groups above the minimum size limit of 20 employees set for the survey, all geographic regions, and all manufacturing industries. Starting with a list of establishments for each state, the method followed was to select, on a systematic basis, the number of establishments required so that each size group was represented in proportion to its relative importance in terms of employment, as follows: The size of the sample resulting from this design (approximately 1,100 establishments) was such that the rate of response, a key problem to be studied, could be ascertained for the various component groups. In principle, if all establishments were to return usable and reliable questionnaires, estimates of practices and expenditure levels, reasonably representative of manufacturing as a whole, could be derived. However, separate estimates for each particular industry would not be practicable with a sample of this size. Such a response, of course, was not expected. What was hoped for was a return of about 500 usable questionnaires, broadly representative of the sample, which would provide an adequate basis for examining the problems to which the study was directed. The conclusions arrived at might be tentative but they would represent an advance over present knowledge. This rate of response, it was believed, would be sufficient to reflect relatively uncommon situations. The nature and characteristics of the response and nonresponse are examined later. 5 The method of selection yielded a number of establishments of the same multiplant company or a single establishment of a multiplant company. Presurvey discussions with a number of management 5 The techniques normally used in the Bureau's industry wage surveys conducted by means of mail questionnaires, in which nonresponding establishments are covered by actual plant visits, were not applied to this study because of the costs. involved and the limited objectives of the study. 37456 0-59--23 |