Employer Costs for Employee Compensation
Changes to NAICS and SOC: Questions and Answers
- What is the ECEC change to NAICS and SOC?
- Why is the ECEC changing classification systems to NAICS and SOC?
- What new series are in the NAICS-SOC tables?
- How do the NAICS-SOC industry and occupational classifications differ from SIC-OCS?
- Will the published series in the NAICS-SOC based ECEC be similar to SIC-OCS?
- Will the Employment Cost Index (ECI) and the other National Compensation Survey products switch to NAICS and SOC with the ECEC?
- How do I compare data among the National Compensation Survey products until all products change to NAICS and SOC?
- Will there be a transition period when the ECEC will publish SIC-OCS and NAICS-SOC estimates at the same time?
- What are the advantages of the NAICS and SOC classification schemes?
- What is planned for the ECEC?
- How do I obtain more information on the ECEC?
- Where can I obtain more information on NAICS and SOC?
1. What is the ECEC change to NAICS and SOC?
The Employer Costs for Employee Compensation (ECEC) switched to new industry and occupation classification systems with the release of the March 2004 data. The 2002 North American Industry Classification System
(NAICS) is now used to classify industries and the 2000 Standard Occupational Classification (SOC) system is used to classify occupations. These systems replace the 1987 Standard Industrial Classification System (SIC) and the
Occupational Classification System (OCS) that were formerly used in the ECEC. Estimates using SIC and OCS will no longer be produced.
2. Why is the ECEC changing classification systems to NAICS and SOC?
The United States adopted NAICS and SOC as the standard industrial and occupational classification systems to be used by all Federal statistical agencies to provide a means of comparing data across agencies. A U.S. Office
of Management and Budget mandate requires all statistical agencies to make this change. In addition, NAICS is designed to provide comparability between statistical systems of the United States, Mexico, and Canada, the three
partners in the North American Free Trade Agreement (NAFTA).
The ECEC uses employment estimates from the Current Employment Statistics survey as weights and these estimates are now available only on a NAICS basis. Employment estimates on an SIC basis are no longer available from the
Current Employment Statistics survey. Because the ECEC data are classified by industry and occupation, BLS is switching to SOC at the same time.
3. What new series are in the NAICS-SOC tables?
Here are the primary NAICS and SOC categories:
NAICS industry coverage
- Trade, transportation, and utilities
- Financial activities
- Professional and business services
- Education and health services
- Leisure and hospitality
- Other services
- Public administration
SOC occupation coverage
- Management, professional, and related occupations
- Management, business, and financial
- Professional and related
- Service occupations
- Sales and office occupations
- Sales and related
- Office and administrative support
- Natural resources, construction, and maintenance occupations
- Construction and extraction
- Installation, maintenance, and repair
- Production, transportation, and material moving occupations
- Transportation and material moving
Estimates for civilian, private industry, and State and local government have been maintained, as well as estimates for goods-producing and service-providing industries. More detail is shown in the education and health service industries and professional and related occupations.
Estimates are also published for worker and establishment characteristics such as collective bargaining status, metropolitan and nonmetropolitan area, region, census division, full- and part-time status, and establishment size.
4. How do the NAICS-SOC industry and occupational classifications differ from SIC-OCS?
The industry and occupational classifications are different, and consequently the cost per hour worked estimates may differ. In some instances the titles may be the same but the estimates are not comparable because the NAICS or SOC definition is different. For more information on comparability between the series, see the references at the end of this document.
5. Will the published series in the NAICS-SOC based ECEC be similar to SIC-OCS?
The ECEC tables offer the same measures as in the past and the structure and layout of the tables are similar. The tables still contain total compensation and its components—wages and salaries and the cost of employee benefits. Benefit categories are almost identical to the current tables, with the exception of titles for premium pay and OASDI. They are referred to as "Overtime and premium" and "Social Security," but the data for these series are comparable to the former series. Economic sector classifications for all civilian, private industry, and State and local government are presented in separate tables as in the past. Worker characteristics published in the past also appear in the NAICS-SOC-based tables.
NAICS and SOC series with the same titles as SIC and OCS may not be comparable. The higher level occupational definitions, such as civilian workers and private industry workers, are the same for both classification systems; however, the more detailed occupational and industry classifications may differ. NAICS and SOC classification systems frequently yield series with different definitions than the previous classification systems resulting in many NAICS and SOC series not being comparable to the SIC industry or OCS occupational classification systems.
6. Will the Employment Cost Index (ECI) and the other National Compensation Survey products switch to NAICS and SOC with the ECEC?
Not at this time. The ECEC uses employment estimates from the Current Employment Statistics Survey, which has converted to NAICS and SOC; it will be the first National Compensation Survey product to be published using NAICS and SOC. The other National Compensation Survey products, not dependent on the Current Employment Statistics survey, will not change at this time but will be converted to the NAICS and SOC systems during the next few years. Although the ECEC is derived from data collected for the ECI, BLS is changing the ECEC first because the Employment Cost Index estimation system will take longer to revise. The ECI will continue to be computed on an SIC and OCS basis until 2006. For a schedule of dates for conversion of National Compensation Survey products, see the following BLS website locations:
7. How do I compare data among the National Compensation Survey products until all products change to NAICS and SOC?
Because not all National Compensation Survey products are making the switch to NAICS and SOC at the same time, comparing data between National Compensation Survey products may not be appropriate for a given series during the transition phase. Many series have significant employment composition differences. For example, the composition of wholesale trade and retail trade series differs between NAICS and SIC and comparing estimates from these series across National Compensation Survey products is not recommended.
8. Will there be a transition period when the ECEC will publish SIC-OCS and NAICS-SOC estimates at the same time?
No, there are no plans to publish data for both old and new industry and occupation classification systems concurrently.
9. What are the advantages of the NAICS and SOC classification schemes?
The advantages include:
- NAICS and SOC ensure that economic statistics reflect our Nations changing economy. They include industries and occupations that reflect changes in information services, health care, and high-tech manufacturing areas.
- In switching to NAICS and SOC, the ECEC will conform to the classification system that will be used uniformly by all statistical agencies and provide more detail than the current systems.
- NAICS and SOC, developed in cooperation with Canada and Mexico, allows for comparisons across North America, a desirable feature of statistical data for economic analysis of the global economy.
- NAICS and SOC classification offers data collectors and micro-data users greater coding flexibility than is available in the SIC and OCS when classifying industries and occupations: NAICS and SOC has a six digit hierarchical coding system compared to four-digit in SIC and OCS.
10. What is planned for the ECEC?
BLS will be evaluating additional series for publication.
11. How do I obtain more information on the ECEC?
Data are available on the Internet site www.bls.gov/ncs/ect/, by email request, or by telephone (202) 691-6199.
12. Where can I obtain more information on NAICS and SOC?
Detailed information on NAICS and SOC, including background and definitions are available from the BLS website: www.bls.gov/bls/naics.htm and www.bls.gov/soc/.
Highlights About the Change to NAICS and SOC
Employer Costs for Employee Compensation ECEC Changes to NAICS and SOC
Comparing Current and Former Industry and Occupation ECEC Series
Last Modified Date: November 3, 2022