Technical Note – Impact of COVID-19 on the Earnings and Labour Costs release – updated Quarter Q2 2022
Introduction
Preliminary Earnings and Labour Costs (ELC) release estimates for the second Quarter (Q2) of 2022 and Final estimates for Quarter 1 (Q1) 2022 are being published tomorrow, 30 August 2022. The aim of this Technical Note, published the day preceding the Earnings and Labour Costs release, was to outline to ELC users the impact of COVID-19 on the ELC release. As the COVID 19 restrictions and income support schemes introduced in response to the COVID-19 pandemic have now ended, the publication of this Technical Note will be discontinued.
Earnings and Labour Costs (ELC) Background Information
The ELC release is published based on data collected by the Earnings, Hours and Employment Costs Survey (EHECS). The EHECS collects data from enterprises with three or more employees in the NACE Rev 2 Industrial Sectors B–S inclusive.
The following are the groupings of NACE industrial sectors that are used when presenting ELC data:
Sector Group Sector Name
B-E Industry
F Construction
G Wholesale & retail trade: repair of motor vehicles & motorcycles
H Transportation & storage
I Accommodation & food services activities
J Information & communication
K-L Financial, insurance & real estate activities
M Professional, scientific & technical activities
N Administrative & support services activities
O Public administration & defence
P Education
Q Human health & social work activities
R-S Arts, entertainment, recreation & other service activities
All enterprises with 50 or more employees and a sample of those with 3 to 49 employees are surveyed as part of the EHECS each quarter.
The information collected from an enterprise as part of the survey includes:
Imputation is carried out for non-responding enterprises with 50 or more employees. Where an enterprise responded in at least one of the previous four quarters ratio-imputation is used to estimate figures for that enterprise for the current quarter. For enterprises that did not respond in any of the previous four quarters a stratum average imputation method is used to estimate the missing variables. These estimates are based on respondent enterprises of a similar size and activity.
For enterprises with 3 to 49 employees inclusive, a weighting factor (the reciprocal of the sampling fraction) is used to weight the estimates up to the total population for both employees and enterprises. Enterprises with 50 or more employees are assigned a weight of 1 as the EHECS sample consists of a census of these enterprises.
All enterprises' data are contained in the quarterly dataset which is tabulated to produce the aggregates which are published in the ELC quarterly release. Results for the most recent quarter are published initially as “Preliminary” estimates and are revised and relabelled as “Final” when the next quarterly release is published three months later.
COVID-19 Income Supports
During Q2 2022, there was one remaining scheme being operated by the Government to support those whose income from employment had been affected due to COVID-19.
The COVID-19 Pandemic Unemployment Payment (PUP) scheme, which was administered by the Department of Social Protection (DSP), operated to provide a social welfare payment to those who lost their employment because of the COVID-19 crisis, ended on 25 March 2022.
The Employment Wage Subsidy Scheme (EWSS), which was administered by the Revenue Commissioners, ended during Q2 2022. The EWSS enabled employees, whose employers were affected by the pandemic, to receive significant supports directly from their employer through the payroll system. This scheme ended for most enterprises on 30 April 2022 and ended on 31 May 2022 for all remaining enterprises directly impacted by the public health restrictions introduced in December 2021.
The Central Statistics Office (CSO) engaged extensively with both the Revenue Commissioners and the DSP to understand the mechanics behind the various income supports. The CSO also engaged with Eurostat, the European statistical agency, to determine the statistical treatment of these income supports for the purpose of data collection for EHECS and the reporting of the related outputs.
Any payments related to the PUP scheme were not collected by EHECS or recorded in the ELC release. Such payments were paid by DSP to a person who had lost income from employment and where no attachment in the form of an employment contract was maintained between the employer and employee. Eurostat confirmed that such payments should not be recorded in labour costs statistics.
EWSS payments are recorded as follows in the ELC release:
Composition of employment and the ELC release
Data in relation to changes in the composition of employment with respect to the individual characteristics of employees (e.g., age, education, or gender), employment types (e.g., permanent or temporary contracts) and sectoral shifts are not collected by EHECS. When considering the change in earnings, it should be noted that there is a compositional effect due to the significant changes in employment in certain sectors. The composition of the labour market in Q2 2022 is very different to the composition of the labour market in Q2 2021, against which the annual changes are reported in the ELC release.
Definitions for the ELC release for Q2 2022
Definitions of the variables included in the ELC release are available in the background notes of the ELC release which are also available separately here
Registered employment refers to the employment of respondent enterprises at the end of the reference quarter.
Average employment refers to the average of the quarters’ opening employment and closing employment.
Average weekly earnings are calculated by dividing the total earnings for the quarter by the average number of persons employed during the quarter and then dividing that by 13 (the number of weeks in a quarter).
Average weekly paid hours are calculated by dividing the total paid hours for the quarter by the average number of persons employed during the quarter divided by 13 (number of weeks in a quarter). Total paid hours are the sum of regular paid hours and paid overtime hours, where regular paid hours are the normal working hours of an employee and not the hours worked.
Average hourly earnings are calculated by dividing the total earnings for the quarter by the total paid hours for the quarter.
Average hourly other labour costs are calculated by dividing the sum of other labour costs (costs to the employer, in addition to wages and salaries, of employing labour with any subsidies and refunds received by the employer deducted) for the quarter by the total paid hours for the quarter.
EWSS scheme
The ELC release presents aggregate results which are based on enterprises’ survey returns. Some enterprises engaged with the CSO over the course of the pandemic to advise that they have issues recording EWSS payments as refunds for their EHECS return. As a result, EHECS data was linked with an administrative data source from the Revenue Commissioners that contains information about the EWSS scheme to allow for the correction of reporting errors. The linkage and analysis were undertaken by the CSO for statistical purposes in line with the Statistics Act, 1993 and the CSO Data Matching Protocol.
Labour Market Insight Bulletin Series 12
The CSO will be presenting some high-level results of analysis of administrative data in the twelfth series of the Labour Market Insight Bulletin, which will be published alongside the ELC release tomorrow.
The Labour Market Insight Bulletin series was developed to complement existing outputs such as the Earnings & Labour Costs release and the Labour Force Survey, and to provide insight into the impact of the COVID 19 related restrictions and income support schemes on the Labour Market. As the COVID 19 restrictions and income support schemes introduced in response to the COVID-19 pandemic have now ended, the Labour Market Insight Bulletin will be discontinued.
The bulletin will include some sectoral analysis to quantify the quarterly percentage change in the volume of employment and earnings by sector from Q1 2020 through to Q2 2022 as well as the annual changes from Q2 2021 to Q2 2022 and an analysis of the earnings for employments that were active in more than one quarter. Additionally, analysis will be presented in relation to employments and earnings directly supported by the EWSS scheme.
There are methodological differences in the calculation of weekly earnings in the ELC release and the Labour Market Insight Bulletin Series.
The ELC is based on survey data which collects aggregated information from enterprises and presents information in relation to both earnings (wages and salaries) and other labour costs (other costs to the employer, in addition to wages and salaries, of employing labour which includes social contributions, expenses, subsidies, benefits in kind). The analysis included in the Labour Market Insight Bulletin Series 12 is based on Revenue’s employee level tax data and data provided by Revenue in relation to the TWSS and EWSS. Earnings estimates provided includes earnings and taxable benefits in kind.
The method of calculation of variables in the ELC release is outlined above. Average weekly earnings are calculated by dividing the total earnings for the quarter by the average number of persons employed during the quarter and then dividing that by 13 (the number of weeks in a quarter). Average weekly earnings in the Labour Market Insight Bulletin Series are calculated by summing the total payments received by an employee in a quarter and dividing by the number of insurable weeks worked by the employee in that quarter.
If users have questions or need clarification in relation to anything outlined in this Technical Note, the Earnings and Labour Costs release or the Labour Market Insight Series 12, please contact us at earnings@cso.ie
For information, this technical note was issued on 29 August 2022.
