EMPLOYEE BENEFITS
IN WYOMING: 2000

Prior to our Wyoming Employee Benefits Program there were no data available regarding benefits solely for the State of Wyoming. The Bureau of Labor Statistics (BLS) conducts a national Employee Benefits Survey of small private establishments in even years and medium and large private establishments in odd years. The BLS survey is only collected at one point in time, unlike the Wyoming program which is collected quarterly. Quarterly collection will enable us to see seasonal changes in the data. The Unemployment Insurance (UI) Covered Employment database allows R&P to select a representative sample regarding this information and make it available to the public. Since this is a mail survey it can be conducted at a relatively low cost, unlike the BLS survey which is conducted through personal visits and phone contact.

        We present survey results in two different ways:
                 1. what percent of employers offer benefits, and
                 2. what percent of employees are offered benefits.

The kind and number of benefits a company offered or an employee received in 2000 were associated largely with the industry, company size and geographic region in which the company was located. The full- or part-time status of the employee is associated with making benefits available to employees. 97.1 percent of full-time employees in Government receive paid holidays but only 47.5 percent of full-time employees in Construction receive that same benefit. In companies with more than 100 employees, 99.4 percent of full-time employees are offered health insurance compared to 74.5 percent of full-time employees in companies with fewer than 5 employees. 77.8 percent of full-time employees in the Southwest Region of the state received paid sick leave compared to only 58.3 percent of employees in the Central Region. In Wyoming, total compensation was comprised of 81.2 percent for wages and salaries and 18.8 percent for benefits in 1999 (see Figure 1).

Rising healthcare costs and the controversy surrounding the future of Social Security place increased importance on benefits such as employer provided health insurance and retirement plans. A serious illness can be financially devastating to anyone lacking health insurance. Many people do not want to rely exclusively on Social Security when it comes to their retirement. Thus, employer provided benefits may be a major reason why certain employers are more attractive to workers than others. This is a concern for employers. Many employers have difficulty attracting and retaining employees.³ Employees understand that wages and salaries alone do not describe all the compensation they may receive. When comparing different employers, they also take into account the benefits the employer offers. A lower wage or salary may be offset by a more generous benefits package. Policymakers are also concerned with employee benefits. They have voiced concerns about the lack of health insurance in this country and the strain retired baby boomers will put on the Social Security system.

This publication describes the kind of benefits employees can expect to receive in different industries, regions and among companies of varying sizes in Wyoming. We also look at benefit costs as a percentage of total compensation and compare this number to a neighboring state, South Dakota, and the U.S. as a whole.

Section IV: Review of the Literature

Survey research and benefits publications were reviewed for this study. To learn more about how to do survey research we consulted Fink and Kosecoff's book How to Conduct Surveys: A Step-by-Step Guide and Fowler's Improving Survey Questions: Design and Evaluation.⁴

In order to keep up with changes regarding benefits in the U.S., we read many publications by the Bureau of Labor Statistics such as Monthly Labor Review, Compensation and Working Conditions, and their news releases regarding employee compensation costs.⁵ All these publications can be found at http://www.bls.gov.

We also reviewed publications regarding employee benefits from other states such as North Dakota, South Dakota, South Carolina and New Hampshire.⁶ Each of these states has conducted their own benefits survey. Unfortunately, they are not all carried out in the same way, and it is therefore difficult to make meaningful comparisons between states.

Section V: Developing the Benefits Program

While working on the 2000 Employee Benefits questionnaire, we kept the desired results in mind. We also took a close look at our 1999 pilot study, to see what worked and what did not.

The major problem with the 1999 pilot study was the question regarding the cost of providing benefits. Respondents were unable to calculate their benefit costs as a percentage of total compensation. We therefore consulted Internal Revenue Service (IRS) and state tax forms to see what kind of reporting employers were required to do. The employers' record keeping should then complement these requirements. We concluded that if we asked the employer for data or information that they have to provide to other agencies, it should be easy for the employer to report them to us as well. For example, we found that employers have to report their retirement costs separately from other benefits on their income tax return. Employers are also obligated to report Social Security, wages and unemployment insurance. Then, we came up with questions for the employers for the 2000 study (see Appendix B). What were your annual wages? What was the cost of your retirement benefits? What was the cost of your legally required benefits? What was the cost of your other benefits? We also asked the employer what percentage they paid on insurance benefits and retirement plans to determine who is paying most of the cost associated with benefits, the employer or employee. From there, we calculated the percentage cost of benefits ourselves. Nevertheless, only 64.1 percent of the respondents answered the questions regarding benefit costs. The questions still caused difficulties for employers, because we had asked for a break down of the cost of providing benefits by full- and part-time employment.

Section VI: Drawing the Sample

A stratified random sample of 400 companies was selected each quarter to receive the questionnaire for a total of 1,600 companies for the year. We conducted the benefits survey quarterly to identify any trends in the incidence of benefits.

The sample was drawn from the most current Quarterly Unemployment Insurance (QUI) employer database available. This database contains data reported by approximately 18,000 employers on a quarterly basis for Unemployment Insurance purposes. Companies that reported zero employees for all three months and employers with household employees were excluded from the database and not included in our sample.

Companies that had previously been sampled were also excluded from the sample. We added the following data fields: average employment, employment size class, industry by major division and region.⁷ The employment size class size is determined by an employers' average employment in the quarter we sampled. The employers were divided into six different employment size classes (see Table 1). The industry by major division was determined by the Standard Industrial Classification (SIC) code assigned to that employer (see Figure 2). The region is determined by the county code assigned by the Wyoming Department of Employment (see Map).

We then selected a random sample stratified by employment size class, industry and region for companies with 1-99 employees. Each quarter, we sampled 25 percent of the companies with 100 or more employees; by the end of the year, all 274 large employers had been sampled. This was necessary to get an adequate sample because of the small number of large employers in Wyoming. Large employers are therefore proportionally overrepresented in our study.

Section VII: Program Improvements

We further revised the questionnaire for 2001 to more clearly identify what kind of retirement benefits employers offer and who is paying for them. This area seemed to cause problems for employers in 2000. Employers often included Workers' Compensation in Disability Insurance. This question was not intended to include legally required benefits (see Appendix B), so an explanation was added.

In the 1999 pilot survey, employers were asked to separate employees into broad occupational groups when reporting benefits. In 2000, we revised the survey to distinguish between full- and parttime employment instead of broad occupational groups. This revision resulted in problems for employers who had trouble separating wages and cost of benefits for full-time and part-time employees. They often just reported one number for both. Therefore, we added full-time and part-time wages and benefits costs together for the employers who separated those numbers. This was necessary to have an adequate response to report. We then reported only one percentage for full- and part-time employees combined. Any incomplete responses to the last four questions regarding the cost of providing benefits were discarded because they would have distorted survey results. To improve the 2001 survey, employers do not have to separate the benefits of full- and part-time employees unless there is a difference in the amount of benefits received.

To further improve the results, the sample size has been increased to 500 employers in each quarter of 2001. In spite of the larger sample size, we are hoping to increase our response rate to 65 percent for 2001.

Section VIII: Results

The overall response rate for the survey in 2000 was 60.1 percent, or 970 employers out of 1,600 surveyed. These 970 companies employed a total of 35,334 employees. Of those, 79.6 percent were employed full-time and 20.4 percent part-time (see Figure 6). Managerial and professional employees held 24.7 percent of those jobs, clerical and technical employees 25.6 percent and production, service and maintenance employees 49.7 percent (see Figure 7). Additionally, Figures 3, 4, and 5 show response rates by employer size class, region and industry. The response rate by size class indicates that small employers are more likely to reply than larger employers. Statewide employers are much less likely to respond to the questionnaire than any other employers. The response rate by industry shows that Government employers are the most likely to respond.

The results were weighted by response rate for each industry to adjust for non-response. They were also weighted against employment for each industry as estimated in the Current Employment Statistics (CES). For agricultural employees, we used UI Covered Employment data, because CES does not include Agriculture. This was done to account for employment differences in our sample. In order to adjust for differences in employing units in each industry, we weighted our sample by units reported for each industry to UI Covered Employment and also by response rate.

The three benefits employers most frequently offered to full-time employees were paid vacation (75.7%), health insurance (66.1%) and paid holidays (65.0%); see Table 2. The average number of paid vacation days after one year of employment and paid holidays were 9.9 and 8.5 days (see Table 11) for full-time employees. To their part-time employees, they most often offered a Christmas bonus (36.3%), employee discount (35.0%) and paid jury duty leave (27.6%); see Table 2.

The three benefits full-time employees most often received were health insurance (94.7%), paid vacation (92.9%) and dependent health insurance (91.2%); see Table 6. Part-time employees were offered employee discounts (44.3%), uniforms (42.7%) and paid jury duty leave (36.9%) most often (see Table 6). Keep in mind that the survey only asked if the employees were offered certain benefits. This does not mean that they actually elect to receive the benefits. This holds especially true for benefits where the employee may have to share some of the cost with the employer, such as health insurance. The analysis of the survey showed that employers on average pay 83.8 percent of the health insurance cost. For dependent health insurance the average was 58.1 percent (see Table 10).

Analyzing benefits paid to employees by industry reveals that employees in Government, Mining and Finance, Insurance, & Real Estate (FIRE) are most likely to receive benefits. The least likely to receive benefits are employees in Agriculture, Construction and Retail Trade (see Table 7). For example, 97.1 percent of full-time employees in Government receive paid holidays compared to only 72.1 percent of full-time employees in Retail Trade. If we compare this to the employers who pay benefits, we see a different picture. Government and FIRE are still most likely to pay benefits but Mining is replaced by Wholesale Trade, indicating there are more large employers in Mining and more small employers in Wholesale Trade (see Table 3).

There appears to be a relationship between benefits and firm size.⁸ For example, 99.4 percent of full-time employees in companies with 100 or more employees receive health insurance compared to only 74.5 percent of full-time employees in companies with one to four employees (see Table 8). The same is true for employers. Health insurance was offered to full-time employees by 44.3 percent of companies with one to four employees and by 98.6 percent of companies with 100 or more employees (see Table 4). It may seem odd that the percentage of employees in firms with one to four employees receiving benefits is, in many cases, higher than the percentage of employees in firms with five to nine employees. However, firm size is determined by the number of employees a company has in Wyoming and not by the number of employees a company has nationwide. For example, well known national companies with 100 or more employees nationwide may have only one or two representatives in Wyoming. Therefore, readers should exercise caution when comparing benefits across firm size.

The regional analysis (see Map) shows that employees working for companies that are Statewide are the most likely to receive benefits (see Table 5), because 82.2 percent of those companies have 100 or more employees. ⁹ Larger companies are more likely to pay benefits. Employees in the Central Region are the least likely to receive benefits, due to a large percentage of companies with one to four employees and a low percentage of employers that have 100 or more employees. Keep in mind, however, that employees may live and work in the Central Region but work for a company that is classified as Statewide.

On the other hand, Table 5 shows that a large percentage of companies in the Central Region do offer benefits. Since these did not add up to many workers receiving benefits, these companies must have fewer workers. This confirms that many of the companies in the Central Region are small or classified as Statewide.

How much did employers spend on benefits as a percentage of total compensation in 1999? Our study showed that 18.8 percent of total compensation went to paying benefits in the year 1999 (see Figure 1). Comparatively, the cost of benefits estimated by the BLS for the U.S. was 27 percent of total compensation.¹⁰ South Dakota, a neighboring state that conducts an employer benefits survey, reported the cost of benefits at 22.1 percent.¹¹ In our questionnaire, employers were asked to separate compensation by wages and salaries, costs for retirement plans, legally required benefits (e.g., Social Security and Workers' Compensation) and all other benefits. Figure 3 illustrates the breakout by percentage of total compensation for these different benefit groups.

Section IX: Conclusion

Full-time employees are much more likely than part-time employees to receive benefits. Employees in larger companies are also at an advantage when it comes to being offered benefits, as are employees who work in certain industries such as Government, FIRE and Mining. The cost of providing benefits as a percentage of total compensation was 18.8 percent in Wyoming for the year 1999.

The Employee Benefits Program will be continued for the year 2001 with some slight revisions. This will enable us to develop a meaningful time series to see developing trends in benefit costs.

1 Wyoming Department of Employment, Research & Planning, Wyoming Wage Survey.

2 Carola Cowan, "Employee Benefits Survey: Compensation Revisited," Wyoming Labor Force Trends, August 2000; Carola Cowan, "Compensation Costs in Wyoming," Wyoming Labor Force Trends, December 2000.

3 Craig Radden Henderson, "Retention of Wyoming's Labor Force: Holding on to Households," Wyoming Labor Force Trends, February 2001.

4 Arlene Fink and Jacqueline Kosecoff, How to Conduct Surveys: A Step-by-Step Guide, 1998. Floyd J. Fowler Jr., Improving Survey Questions: Design and Evaluation, 1995.

5 U.S. Bureau of Labor Statistics, "Employer Costs for Employee Compensation-March 2000," News Release, June 29, 2000.

6 Job Service North Dakota, Labor Market Information, North Dakota Benefits Survey 2000; South Dakota Department of Labor, Labor Market Information Center, South Dakota Benefits Publication, February 2000; South Carolina Employment Security Commission, 1999 South Carolina Employer Practices and Benefits Survey, February 2000; New Hampshire Employment Security, Economic and Labor Market Information Bureau, Childcare 2000: A Survey of New Hampshire Employers, July 2000.

7 The employment size class is determined by the average employment a company reports in Wyoming.

8 U.S. Bureau of Labor Statistics, "Employer Costs for Employee Compensation-March 2000," Table 8, p. 13. This table shows the relationship between employee benefits and firm size.

9 Statewide refers to employers that have employees in more than one county.

10 U.S. Bureau of Labor Statistics.

11 South Dakota Department of Labor, Labor Market Information Center, South Dakota Benefits Publication, 2000.