Workers' Compensation Denominators: Full-Time Equivalent Employees

Tuesday, June 21, 2016: 10:52 AM
Tikahtnu E, Dena'ina Convention Center
Martha Jones , Vanderbilt University, Nashville, TN
BACKGROUND:  

For prevention and intervention activities, many states would like to calculate injury and illness incidence rates by industry and by employer using their own administrative workers’ compensation data in the numerator.  In some cases, states would also like to calculate these rates for particular injury causation categories or for sub-state geographies.  Although the U.S. Bureau of Labor Statistics (BLS) publishes incidence rates by industry at the state level in the Survey of Occupational Illness and Injury (SOII) program, rates by employer and at lower levels of geography are not available. Moreover, concerns have been raised about a SOII undercount of injuries and illnesses.  The ideal denominator for illness and injury incidence rates is full-time equivalent (FTE) employee counts, which control for hours worked.  Most states, however, do not collect number of employees or hours worked data from employers. 

METHODS:  

The paper compares FTE employee estimates calculated using several sources: hours worked data by industry reported by households to the Current Population Survey (CPS) and the American Community Survey (ACS); hours worked data by industry reported by employers to the Current Employment Statistics (CES) program; and hours worked data by industry from the BLS Labor Productivity and Cost (LPC) program, which combines data from the CES and the CPS.  Data from California, Ohio and Washington are used in addition to data for the nation.  Questions addressed include whether national or state-level data should be used and how to obtain FTE estimates at the most detailed North American Industry Classification System (NAICS) code level. FTE estimates can be directly calculated using state-level ACS and CPS survey data for hours worked by industry.  Alternatively, an indirect method combines national LPC data on hours per employee by industry with employee count data at the state or employer level from the Quarterly Census of Employment and Wages (QCEW) to estimate FTEs. 

RESULTS:  

Our preferred method for calculating FTE employee estimates is the indirect method.  In addition, national CES data at the six-digit NAICS code can be used to estimate number of FTEs at a more detailed industry level.  Sources such as CPS, ACS or CES data may be more suitable for certain specific NAICS industries or industries with significant regional variation.

CONCLUSIONS:  

While we have been able to suggest a reasonable choice of method for estimating FTEs, additional investigation has the potential to improve these recommendations.