Document ID: EPA-HQ-OPPT-2008-0296-0022
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2010-01-06T05:00Z

OMB Control Number 2070-0173; EPA ICR Number 2327.02

ICR ATTACHMENT 11

Derivation of Industry Wage Rates 

and Agency Costs

1.  DERIVATION OF INDUSTRY WAGE RATES

This attachment provides a brief discussion of the methods that were
used to derive the final “fully loaded” wages used in the
calculation of quantified costs.  Base hourly wages for relevant labor
categories were loaded with factors for benefits and overhead to derive
a loaded hourly rate.   The derivation of fully loaded wages in year
2007 dollars, for each of the labor categories used in this ICR, is
discussed in Section 1 and is summarized in Table 4-1.  

The basic method used to derive loaded wage rates for technical,
managerial, and clerical personnel is described more fully in Wage Rates
for Economic Analysis of the Toxics Release Inventory Program (EPA,
2002). 

December 2007 average wages for technical, managerial, and clerical
labor were taken from the Employer Costs for Employee Compensation
(ECEC) report from the Bureau of Labor Statistics for all
goods-producing, private industries, white collar occupations (BLS,
2007).

The additional cost of benefits, such as paid leave and insurance
(“fringe benefits”), specific to each labor category, is also taken
from the same BLS series.  Fringe benefit as a percentage of wage is
then calculated separately for each labor category.  For example, the
average wage rate in December 2007 for technical labor was $32.52, and
the average fringe benefit was 40.9 percent of the wage, or $13.30.  An
additional loading factor of 17 percent is applied to wages for
overhead.  This overhead loading factor is added to the benefits loading
factor, and the total is then applied to the base wage to derive the
fully loaded wage.  The fully loaded wage for technical labor, for
example, is $33.25 x (1+0.409 + 0.17) = $33.25 x (1.611) = $51.35. 
Fully loaded costs for managerial and clerical labor were calculated in
a similar manner.Table 4-1. Derivation of Loaded Wage Rates

Labor Category

	

Data Sources	

Uninflated wages and fringes / hour	

Fringe benefits as % of wage	

Over-

head as % of wage1	

Fringe + Overhead factor	

Loaded Wage Rate

(2007$) 

Date	

Wages 

($)	

Fringe benefits 

($)

Managerial	

BLS Employer Costs for Employee Compensation.  Private industry,
goods-producing industries, white collar occupations. Management,
business and financial [BLS, 2007]	

Dec.

2007	

$36.44	

$16.07	

44.1%	

17%	

1.579	

$58.71

Technical 	

BLS Employer Costs for Employee Compensation. Private industry,
goods-producing industries, white collar occupations. Professional and
related. [BLS, 2007]	

Dec 2007	

$32.52	

$13.30	

40.9%	

17%	

1.611	

$51.35

Clerical	

BLS Employer Costs for Employee Compensation.  Private industry,
goods-producing industries, white collar occupations. Office and
administrative support.[BLS, 2007]	

Dec

2007	

$15.78	

$8.28	

44.9%	

17%	

1.619	

$25.54

1An overhead rate of 17 percent applied to wages is used for consistency
with recent EPAB economic analyses for two major rulemakings: Wage Rates
for Economic Analyses of the Toxics Release Inventory Program, June 10,
2002, and the Revised Economic Analysis for the Amended Inventory Update
Rule: Final Report, August 2002.    

Note: Calculations are based on unrounded values, so the total may not
equal the product of the rounded factors.

2.  AGENCY COSTS

EPA’s costs to review and process industry submissions (SNUNs,
requests to modify SNUR, and requests for equivalency determination) are
assumed to be the same as EPA costs to review PMNs.  The previous ICR
calculated an average of the annual salaries for GS-12 Steps 1 and 10
for Washington, DC.   However, to be consistent with the New Chemicals
ICR and the Economic Analysis for the proposed e-PMN rule, Agency wage
rate data used to calculate labor costs were gathered from the U.S.
Office of Personnel Management Salary Table 2007-DCB, for a GS-13, step
5 employee in the Washington, D.C. (OPM, 2008).   A loading factor of
1.6 was applied to the base salary of $89,985 to arrive at the 2007
loaded salary of $143,976. The final loaded hourly wage of $69.22 was
calculated by dividing the loaded salary by the 2,080 hours associated
with a full-time employee to arrive at the 2007 loaded wage rate of
$143,976. This loaded hourly wage was used in calculations of Agency
cost.

Examples of the activities EPA undertakes in reviewing and processing
SNUNs include prenotice consultation; conducting an administrative
prescreen, and processing the notice and user fee; conducting
engineering/exposure and exposure/fate reviews; holding internal
decision-making meetings; developing, negotiating, and then reviewing
data submitted from a consent order; and reviewing Notices of
Commencement.  

EPA uses extramural contractor labor to assist in some of the
SNUN-related activities.  The cost of extramural labor in this process
is estimated to be $814 for SNUNs submitted via CDX, and $975 for
non-CDX submissions. The non-CDX extramural cost is from the 
Premanufacture Review Reporting and Exemption Requirements for New
Chemical Substances and Significant New Use Reporting Requirements for
Chemical Substances, EPA ICR No: 0574.12, OMB Control No.: 2070-0012. 
It was updated to 2007$ using the Bureau of Labor Statistics Producer
Price Index data for the chemical manufacturing industry (BLS series
325).  

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