Attachment F 

Keigwin; Methodology for Estimating OPP ICR Wages Rates for Industry, 

State, and EPA Labor Costs; July 25, 2006 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

JUL 2 5 2006 

Memorandum 

OFFICE OF 

PREVENTION, PESTICIDES AND 

TOXIC SUBSTANCES 

SUBJECT: Methodology for 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: 

of 

BEAD was asked by OPP divisions to standardize the methodology used to estimate the wages 

Pesticide 

personnel 

Programs 

associated with the reporting of information collection requests (ICRs) by Office of 

to improve consistency and efficiency. One reason is that OPP is 

memo, 

streamlining the ICR renewal process by consolidating OPP's ICRs into 6 categories (FEAD 

4-20-06). In this memo BEAD describes the methodology and data sources for 

calculating wage 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 of wage 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 = loaded wage rate + overhead 

overhead includes rent, 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 Employment and Wage Estimates from the Bureau of Labor 

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, consistency is insured. The 

specific NAICS (North American Industry Classification System) and specific website for each 

sector is as follows: 

· ICR Sector NAICS NAICS Sector and Website 

Industry 325300 Pesticide, Fertilizer, & Other Agricultural 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 9991 OO.htm 

Wage rates by labor type. Within each of the above sectors, the wage data are provided by 

Standard Occupational Classification (SOC). The SOC system is used by Federal statistical 

agencies to classify workers into occupational categories for the purpose of collecting, 

calculating, or disseminating data. Each broad occupation includes detailed occupation(s) 

requiring 

what 

similar job duties, skills, education, or experience. For more information on SOC and 

is included in each SOC, see http://www.bls.gov/oes/cuiTentloes stru.htm. The SOCs used 

for the following labor types are listed below and apply to all of the sectors in the above table. 

Labor type . SOC# Standard Occupational Classification 

Management 11-0000 Management Occupations 

Technical 19-0000 Life, Physical, and Social Science Occupations 

Clerical 43-0000 Office and Administrative Support Occupations 

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Benefits. We assume that benefits are 43% of wage 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 

The methods outlined above produce a realistic accounting of the wage rates of personnel whose 

efforts feed into the completion and submission of information to EPA. At the same time, 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 of Labor 

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 tables below show the current labor cost estimates for industry, state governments, and EPA. 

In addition, we have provided the tables below in Excel worksheets (available upon request), 

which are easier to 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. 

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INDUSTRY LABOR COSTS 

Labor Category Formula Managerial Technical Clerical 

Unloaded Hourly =W $47.02 $30.21 $15.41 

Rate 1 

Benefits Lb = BIW 43% 43% 43% 

Percentage2 

Benefits per hour 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 per hour. 

3. U.S. Environmental Protection Agency, EPA Air Pollution Control Cost Manual, Sixth 

Edition, EPA-452-02-001, January 2002, pg. 2-34. The loading for indirect costs is within the 

range of20-70% of the load labor rate (wage+ benefits) suggested in EPA guidance. 

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STATE 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% 

Overhead per hour 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. Fringe benefits/wage per hour. 

3. U.S. Environmental Protection Agency, EPA Air Pollution Control Cost Manual, Sixth 

Edition, EPA-452-02-001, January 2002, pg. 2-34. The loading for indirect costs is within the 

range of20-70% of the load labor rate (wage+ benefits) suggested in EPA guidance. 

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EPA LABOR COSTS 

Labor Category Fonnula Managerial Technical Clerical 

Unloaded Hourly Rate1 =W $43.39 $30.93 $21.99 

Benefits Percentage2 Lb = B/W 43% 43% 43% 

Benefits per hour B = W*Lb $18.66 $13.30 $9.46 

Loaded Hourly Rate Wb~W+B $62.05 $44.23 $31.45 

= W(l+Lb) 

Overhead Percentage3 Lo=OH/Wb 50% . 50% 50% 

Overhead per hour OH = Wb*Lo $31.02 $22.11 $15.72 

Fully Loaded Hourly Wf=Wb+OH $93.07 $66.34 $47.17 

Rate = W+B+OH 

I. Data Source: httQ://www.bls.gov/oes/currentlnaics4 9991 OO.htm 

Management: 11-0000, Management Occupations 

Technical: I 9-0000, Life, Physical, and Social Science Occupations 

Clerical: 43-0000, Office and Administrative Support Occupations 

2. Fringe benefits/wage per hour. 

Edition, 

3. U.S. Environmental Protection Agency, EPA Air Pollution Control Cost Manual, Sixth 

EPA-452-02-00 1, January 2002, pg. 2-34. The loading for indirect costs is within the 

range of 20-70% of the load labor rate (wage+ benefits) suggested in EPA guidance. 

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