TECHNICAL NOTES The international comparisons of hourly compensation costs in manufacturing are prepared to assess differences in employer labor costs among countries. BLS compensation data permit more meaningful comparisons of employer labor costs than data based solely on average earnings. Definitions of average earnings vary considerably by country and do not include many items of labor cost that frequently make up a large portion of total cost. BLS compensation data include nearly all labor costs incurred by employers. Below is a summary of the concepts used in this release. For more detailed information, see www.bls.gov/ilc/ichcctn.pdf. Definitions. Compensation costs include (1) direct pay (all payments made directly to the worker, before payroll deductions of any kind) and (2) social insurance expenditures (employer payments to secure entitlement to social benefits for employees) and labor- related taxes (minus subsidies). The data relate to all employees in manufacturing, including part- time and temporary workers. The self-employed, unpaid family workers, contract workers, and workers in private households are excluded. Compensation Costs Pay for Time Worked * Basic wages * Piece rate * Overtime premiums * Shift, holiday, or night work premiums * Cost-of-living adjustments * Bonuses and premiums paid each pay period Directly-Paid Benefits * Pay for time not worked (vacations, holidays, and other leave, except sick leave) * Seasonal and irregular bonuses * Payments in kind * Allowances for family events, commuting, etc. * Payments to employees' savings funds Employer Social Insurance Expenditures and Labor-related Taxes * Retirement and disability pensions * Health insurance * Income guarantee insurance * Pay for sick leave * Life and accident insurance * Occupational injury and illness compensation * Unemployment insurance * Severance pay * Other social insurance expenditures * Taxes (minus subsidies) on payrolls or employment Methodology. In general, total compensation for each economy is calculated by adjusting earnings series to include items of direct pay, social insurance, and labor-related taxes and subsidies not included in earnings. For economies for which earnings data are not available on a per hour worked basis, BLS makes adjustments in order to approximate compensation per hour worked. Compensation costs are converted to U.S. dollars using the average daily exchange rate for the reference year. Earnings statistics are typically obtained from annual establishment surveys. Data on the other components of compensation are typically obtained from periodic labor cost surveys, employer confederations, and other sources. For the United States, the methods and results differ somewhat from those of other BLS series on U.S. compensation costs. The statistics are adjusted, where possible, to account for major differences in worker and survey coverage. More information on exceptions to these methods, as well as data sources used, may be found in "Country Notes and Data Sources" located at www.bls.gov/ilc/ichccsources.pdf. The compensation measures in this news release are based on statistics available to BLS as of October 2012.