## Attachment F
Keigwin; Methodology for Estimating OPP ICR Wages Rates for Industry, State, and EPA Labor Costs; July 25, 2006UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460


### JUL 

## 2 52006

Memorandum OFFICE OF PREVENTION, PESTICIDES AND TOXIC SUBSTANCES

SUBJECT: Methodologyfor Estimating OPP ICR Wages Rates for Industry, State and EPA Labor Costs. FROM: Richard Keigwin, Director

**G~o..(A·-,<.\A.C'L** f.'

**I"~ c..~~o.-<.-**  **,'"'~** Biological and Economic Analysis Division (BEAD) TO: Bill Diamond Arnold Layne Lois Rossi Elizabeth Leovey Summary: BEAD was asked by OPP divisions to standardize the methodologyused to estimatethe wages ofpersonnel associated with the reporting ofinformation collectionrequests (ICRs) byOfficeof Pesticide Programs to improve consistency and efficiency. Onereason is that OPP is streamlining the ICR renewal process byconsolidating OPP's ICRs into 6 categories (FEAD memo, 4-20-06). In this memo BEAD describes the methodology and data sources for calculatingwage rates that are straight forward, consistent, and easy to replicate for the following:

• Sectors-industry, state government, and EPA.
• Labor types-management,technical, and clerical • Wages-unloaded (basic wages), loaded (wages+benefits), fully loaded (wages+ benefits + overhead)

### Methodology Sources ofwage rates, benefits, and overhead are discussed in the tables and sections below. 

### Unloaded wage rate= hourly wage rate Loaded wage rate = 

### unloaded wage rate

### + benefits benefits include all fringe benefits benefits percentage=benefits/unloaded wage rate 

### Fully loaded wage rate = 

### loadedwage rate 

### +overhead overhead includesrent, computer support, phones, and facilities overhead percentage 

### =overhead/loaded wage rate 

### Data Sources Wage rates by sector. Average wage data for the relevant sectors are.available in the National Industry-Specific Occupational Employmentand Wage Estimates from the Bureau ofLabor Statistics (BLS) at http://www.bls.gov/oes/current/oes nat.htm. By using the same source and the same Standard Occupati9nal Classification (SOC) for all sectors, consistencyis insured. The specificNAICS (North American Industry Classification System) and specific website for each sectoris as follows:



### ·ICR Sector NAICS NAICS Sector and Website Industry 325300 Pesticide, Fertilizer, & OtherAgricultural Chemical Manufacturing http://www.bls.gov/oes/current/naics4 325300.htm State 999200 State Government Government httl2://www.bls.gov/oes/currentlnaics4 999200.htm EPA 999100 Federal Executive Branch httQ://www.bls.gov/oes/currentlnaics4 9991OO.htm 

### Wage rates bylabortype. Within each ofthe above sectors, the wage data are provided by Standard Occupational Classification (SOC). The SOC system is used byFederal statistical agencies to classify workers into occupational categories for the purpose ofcollecting, calculating, ordisseminatingdata. Each broad occupation includes detailed occupation(s) requiring similarjobduties, skills, education, orexperience. Formore information on SOC and what is included in each SOC, seehttp://www.bls.gov/oes/cuiTentloes stru.htm. The SOCs used for the following labortypes are listed below and apply to all ofthe sectors in the above table. 

### Labortype
. SOC# Standard OccupationalClassification Management 11-0000 Management Occupations Technical 19-0000 Life, Physical, and Social ScienceOccupations Clerical 43-0000 Office and Administrative Support Occupations 2Benefits. We assume that benefits are 43% ofwage rates, based on benefits for all civilian nonfarm workers from http://www.bls.gov/ncws.rclcasc/cccc.t01.htm. Overhead. We multiply the loaded wage by 50% (EPA guidelines 20-70%) to get overhead costs. Overhead costs are added to the loaded wage rate to get the fully loaded wage rate.
Conclusion Themethods outlined above produce a realistic accounting ofthe wage rates ofpersonnel whose efforts feed into the completion and submission ofinformation to EPA. At the sametime, these methods are relatively straightforward to derive, replicate, and update. Since these methods use wage and benefit statistics that are readily available from one source, the Bureau ofLabor Statistics, which are updated periodically, they are easy to update and are consistent. This source should be used to update wage rates rather than applying an inflation factor. These wage rates are generally applicable to any information collection activity that requires some mix of management, technical, and clerical time for industry, state government, and EPA. The tablesbelow show the current labor cost estimates for industry, state governments, and EPA. In addition, we haveprovided the tables below in Excel worksheets (available upon request), which are easierto update. While we have provided sufficient information and tools for anyone in OPP to update these wage rates, we suggest requesting them from BEAD who will update these wage rates periodically. BEAD will also update them as requested provided that a sufficient lead time for the update is given. No other information is required for BEAD to update the wage rates, other than about a week's notice. You should also note that the websites listed here could change, although these websites were available last year as well.

3INDUSTRY LABORCOSTS Labor Category Formula Managerial Technical Clerical Unloaded Hourly =W $47.02 $30.21 $15.41 Rate 1 Benefits Lb = 

### BIW 43% 43% 43% Percentage2 Benefitsperhour B=W*Lb $20.22 $12.99 $6.63 Loaded Hourly Wb=W+B $67.24 $43.20 $22.04 Rate = W(l+Lb) Overhead Lo = OH/Wb 50% 50% 50% Percentage3 Overhead per hour OH = Wb*Lo $33.62 $21.60 $11.02 Fully Loaded Wf=Wb+OH $100.86 $64.80 $33.05 Hourly Rate = W+B+OH I. Data Source: httQ://www.bls.gov/oes/current/naics4 325300.htm Management: 11-0000, Management Occupations Technical: 19-0000, Life, Physical, and Social Science Occupations Clerical: 43-0000, Office and Administrative Support Occupations 2. Fringe benefits/wage perhour. 3. U.S. Environmental Protection Agency, EPA AirPollution Control CostManual, Sixth Edition, EPA-452-02-001, January 2002, pg. 2-34. The loading for indirect costs is within the range of20-70% ofthe load laborrate (wage+benefits) suggested in EPA guidance.

4STATE GOVERNMENT LABOR COSTS Labor Category Formula Managerial TechniCal Clerical Unloaded Hourly Rate1 =W $33.29 $23.02 $15.75 Benefits Percentage2 Lb=B/W 43% 43% 43% Benefits per hour B=W*Lb $14.31 $9.90 

### $6.77 Loaded Hourly Rate Wb==W+B $47.60 $32.92 $22.52 = W(I+Lb) Overhead Percentage3 Lo=OH/Wb 50% 50% 50% Overheadperhour OH=Wb*Lo $23.80 $16.46 $11.26 Fully Loaded Hourly Wf=Wb+OH $71.41 $49.38 $33.78 Rate = W+B+OH I. Data Source: htt(2:1/www.bls.gov/oes/current/naics4 999200.htm Management: 11-0000, Management Occupations Technical: 19-0000, Life, Physical, and Social Science Occupations Clerical: 43-0000, Office and Administrative Support Occupations 2. Fringebenefits/wageperhour. 3. U.S. Environmental Protection Agency, EPA AirPollution Control CostManual, Sixth Edition, EPA-452-02-001, January 2002, pg. 2-34. Theloading for indirect costs is within the range of20-70% ofthe load laborrate (wage+benefits) suggested in EPA guidance.

5EPA LABOR COSTS LaborCategory Fonnula Managerial Technical Clerical Unloaded Hourly Rate 1 =W $43.39 $30.93 $21.99 Benefits Percentage2 Lb = B/W 43% 43% 43% Benefits perhour B = W*Lb $18.66 $13.30 $9.46 Loaded HourlyRate
**Wb~W+B** $62.05 $44.23 $31.45 = W(l+Lb) Overhead Percentage3 Lo=OH/Wb 50%
. 50% 50% Overhead perhour OH 

### =Wb*Lo $31.02 $22.11 $15.72 FullyLoaded Hourly Wf=Wb+OH $93.07 $66.34 $47.17 Rate = W+B+OH I. Data Source: httQ://www.bls.gov/oes/currentlnaics4 9991OO.htm Management: 11-0000, Management Occupations Technical: I9-0000, Life, Physical, and Social Science Occupations Clerical: 43-0000, Office and Administrative Support Occupations 2. Fringebenefits/wageperhour. 3. U.S. Environmental ProtectionAgency, EPA AirPollution Control CostManual, Sixth Edition, EPA-452-02-001, January2002, pg. 2-34. The loading for indirect costs is within the range of20-70% ofthe load laborrate (wage+benefits) suggested in EPA guidance.

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