Commission Regulation (EC) No 1738/2005 of 21 October 2005 amending Regulation (EC) No 1916/2000 as regards the definition and transmission of information on the structure of earnings   (Text with EEA relevance)
Date: 2005-10-21
Institutions: European Commission
Subjects: EU statistics, disclosure of information, revenue, wage cost

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COMMISSION REGULATION (EC) No 1738/2005

of 21 October 2005

amending Regulation (EC) No 1916/2000 as regards the definition and transmission of information
on the structure of earnings

(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty
Community,

establishing the European

Having regard to Council Regulation (EC) No 530/1999 of 9
March 1999 concerning structural statistics on earnings and on
labour costs (1), and in particular Article 11(ii) and (iii) thereof,

Whereas:

(1)

(2)

Commission Regulation (EC) No 1916/2000 of 8
September 2000 on implementing Council Regulation
(EC) No 530/1999 concerning structural statistics on
earnings and on labour costs as regards the definition
and transmission of
information on structure of
earnings (2) sets out implementing measures concerning
the definition and breakdown of the information to be
provided and the appropriate technical format for the
transmission of the results as provided for in Article
11 of Regulation (EC) No 530/1999.

The structure of earnings survey for the reference year
2002 was the first survey based on Regulation (EC) No
1916/2000. The experience with this survey has demon-
strated the need to improve the provisions of Regulation
in order to bring them into line
(EC) No 1916/2000,
with the corresponding provisions of Commission Regu-

lation (EC) No 1726/1999 of 27 July 1999 imple-
menting Council Regulation
530/1999
(EC) No
concerning structural
statistics on earnings and on
labour costs as regards the definition and transmission
of information on labour costs (3) and to improve the
links between the data from the various surveys on
earnings and on labour costs every second year.

Regulation (EC) No 1916/2000 should therefore be
amended accordingly.

The measures provided for in this Regulation are in
accordance with
Statistical
the
Programme Committee,

opinion

the

of

(3)

(4)

HAS ADOPTED THIS REGULATION:

Article 1

The Annexes to Regulation (EC) No 1916/2000 are replaced by
the text in the Annexes to this Regulation.

Article 2

This Regulation shall enter into force on the twentieth day
following its publication in the Official Journal of the European
Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 21 October 2005.

For the Commission

Joaquín ALMUNIA
Member of the Commission

(1) OJ L 63, 12.3.1999, p. 6. Regulation as amended by Regulation (EC)
No 1882/2003 of the European Parliament and of the Council (OJ L
284, 31.10.2003, p. 1).
(2) OJ L 229, 9.9.2000, p. 3.

(3) OJ L 203, 3.8.1999, p. 28.

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ANNEX I

LIST OF VARIABLES

1.

Information about the local unit to which the sampled employees are attached

1.1.

Geographical location of the local unit (NUTS-1)

1.2.

Size of the enterprise to which the local unit belongs

1.3.

Principal economic activity of the local unit (NACE Rev. 1.1.)

1.4.

Form of economic and financial control

1.5.

Collective pay agreement

1.6.

Total number of employees in the local unit in the reference month (optional)

1.7.

Affiliation of the local unit to a group of enterprises (optional)

2.

Information on individual characteristics of each employee in the sample relating to the reference
month

2.1.

Sex

2.2.

Age

2.3.

Occupation (ISCO-88 (COM))

2.4.

Managerial or supervisory position (optional)

2.5.

Highest successfully completed level of education and training (ISCED 97)

2.6.

Length of service in the enterprise

2.7.

Contractual working time (full-time or part-time)

2.7.1.

Share of a full-timer’s normal hours

2.8.

Type of employment contract

2.9.

Citizenship (optional)

3.

Information on working periods for each employee in the sample

3.1.

Number of weeks in the reference year to which the gross annual earnings relate

3.2.

Number of hours paid during the reference month

3.2.1. Number of overtime hours paid in the reference month

3.3.

Annual days of holiday leave

3.4.

Other annual days of paid absence (optional)

4.

Information on earnings for each employee in the sample (see also the figure below)

4.1.

Gross annual earnings in the reference year

4.1.1. Annual bonuses and allowances not paid in each pay period

4.1.2. Annual payments in kind (optional)

4.2.

Gross earnings in the reference month

4.2.1.

Earnings related to overtime

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4.2.2.

Special payments for shift work

4.2.3.

Compulsory social contributions and taxes paid by the employer on behalf of the employee (optional)

4.2.3.1. Compulsory social-security contributions (optional)

4.2.3.2. Taxes (optional)

4.3.

Average gross hourly earnings in the reference month

5.

Grossing-up factors

5.1.

Grossing-up factor for the local unit

5.2.

Grossing-up factor for the employees

Optionally, Member States may record more detailed information related to the categories of variable 2.8. They may also
record data for the following components of variable 3.4.: Annual days of sick leave and Annual days of vocational training
(transmission to Eurostat only on request).

Earnings variables of the SES

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ANNEX II

DEFINITION OF VARIABLES

1.

Information about the local unit to which the sampled employees are attached

The compilation of structural statistics on earnings shall be based on local units and enterprises, as defined in
Council Regulation (EEC) No 696/93 (1), and shall provide information on employees in enterprises with 10 or
more employees classified by size and principal activity. Information for employees in enterprises with fewer
than 10 employees is optional. The statistics shall cover all activities defined in sections C to K and M to O of
the general industrial classification of economic activities within the European Communities (hereinafter ‘NACE
Rev. 1.1’) in enterprises with at least 10 employees (2).

1.1.

Geographical location of the statistical unit (NUTS-1)

The region in which the local unit is located should be classified according to the nomenclature of territorial
statistical units (NUTS, level 1).

The transmission codes for the different NUTS categories will be presented in an implementation paper to be
distributed by Eurostat.

1.2.

Size of the enterprise to which the local unit belongs

The size of the enterprise in terms of the number of employees should be assigned to one of the following
bands: 1 to 9, 10 to 49, 50 to 249, 250 to 499, 500 to 999, and 1 000 or more employees. The size class 1 to
9 is optional.

The transmission codes for the size classes listed above will be presented in an implementation paper to be
distributed by Eurostat.

1.3.

Principal economic activity of the local unit (NACE rev. 1.1)

The main economic activity of the local unit should be coded at the 2-digit level of NACE Rev. 1.1 (division
level).

The transmission codes for the different NACE categories will be presented in an implementation paper to be
distributed by Eurostat.

1.4.

Form of economic and financial control of the enterprise
This variable distinguishes only between the categories ‘public control’ and ‘private control’. The first category
refers to any undertaking over which the public authorities may exercise, directly or indirectly, a dominant
influence by virtue of their ownership of it, their financial participation therein, or the rules which govern it. A
dominant influence (or control) on the part of the public authorities shall be presumed when these authorities
directly or indirectly:

— hold the major part of the undertaking's subscribed capital (> 50 %), or

— control the majority of the votes attached to shares issued by the undertaking or can appoint more than half

of the members of the undertaking's administrative, managerial or supervisory body.

The second category is defined analogously. Balanced public and private ownership (50/50 ‘shared control’) is
very rare in practice. Such cases will not therefore be coded separately and should, if they occur, be treated as
being under ‘private control’.

The transmission codes for the two categories of variable 1.4 will be presented in an implementation paper to be
distributed by Eurostat.

(1) OJ L 76, 30.3.1993, p. 1. Regulation as last amended by Regulation (EC) No 1882/2003 of the European Parliament and of the

Council.

(2) The coverage of section L of NACE Rev. 1.1 is optional. The coverage of employees in enterprises with less than 10 employees is

optional as well.

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1.5.

Collective pay agreement

Collective pay agreements covering the majority of employees in the statistical unit may fall into one of the
categories listed below. If no collective agreement exists, this should also be indicated. The categories are as
follows:

— an agreement at national

level, or an interconfederal agreement, covering employees of more than one
industry, and usually signed by one or more trade-union confederations and by one or more national
employers’ organisations,

— an industry agreement setting the terms and conditions of employment for all or most workers and

employees in an individual industry or economic sector,

— an agreement for individual industries in individual regions,

— an enterprise or single-employer agreement covering only those employees with the same employer,
regardless of size. The agreement may cover only certain local units or groups of employees within the
enterprise,

— an agreement applying only to the employees in one local unit,

— any other type of agreement not covered above,

— no collective pay agreement exists.

One of the above categories must be chosen (‘yes’ answer) if more than 50 % of the employees in the local unit
are covered. Several categories may apply simultaneously.

Instead of directly asking for the type of collective agreement, the unit may be asked what collective provisions
are applied and the type of collective agreement determined on the basis of the answers.

The transmission codes for the categories of variable 1.5 listed above will be presented in an implementation
paper to be distributed by Eurostat.

1.6.

Number of employees in the local unit (optional)

This variable represents a head count of the total number of employees in the reference month (e.g. on 1 or 31
October) and covers all employees, including apprentices, paid trainees and students.

1.7.

Affiliation of the local unit to a group of enterprises (optional)
This variable is a binary variable (‘yes’/‘no’) and indicates whether a local unit belongs to a group of enterprises.
The transmission codes for the two categories are set out by Eurostat in an implementation paper.

The group of enterprises is a statistical unit defined in Regulation (EEC) No 696/93. The group of enterprises
should be considered at world level. In most cases the local unit belongs to an enterprise which is not controlled
by any national or foreign group. If local units belong to an enterprise group, this is generally well known. A
practical guideline that can be given to respondents is whether the accounts of the enterprise concerned are fully
consolidated in the accounts of its group of enterprises.

2.

Information on the individual characteristics of each employee in the sample relating to the reference
month

Employees are all persons, irrespective of their nationality or the length of their working time in the country,
who have a direct employment contract with the enterprise or local unit (whether the agreement is formal or
informal) and receive remuneration, irrespective of the type of work performed, the number of hours worked
(full-time or part-time) and the duration of the contract (fixed or indefinite). The remuneration of employees can
take the form of wages and salaries including bonuses, pay for piecework and shift work, allowances, fees, tips
and gratuities, commission and remuneration in kind. The employees to be included in the sample are those who
actually received remuneration during the reference month. Employees who did not receive remuneration in the
reference month should be excluded.

The definition of employees covers manual and non-manual workers and management personnel in the private
and public sectors in economic activities classified to Sections C to K and M to O of NACE Rev. 1.1 in
enterprises with at least 10 employees (1).

(1) The coverage of Section L of NACE Rev. 1.1 is optional. The coverage of employees in enterprises with less than 10 employees is

optional as well.

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The following list gives illustrative examples of categories of employees that are included:

— sales representatives, providing they are on the payroll and receive other forms of remuneration in addition

to any commission,

— paid working proprietors,

— apprentices,

— students and trainees (articled clerks, student nurses, research or teaching assistants, hospital interns, etc.) who
have a formal commitment to contribute to the unit’s production process in return for remuneration,

— interim or temporary workers (e.g. secretarial staff) recruited, employed and remunerated by employment

agencies to work elsewhere, often for temporary periods (1),

— seasonal and occasional workers, if they have a formal or informal agreement with the enterprise or local

unit and pre-defined working hours,

— employees for whom labour costs were incurred in the reference period but who were temporarily not at
work because of illness or injury, holiday or vacation, strike or lock-out, educational or training leave,
maternity or parental leave, reduced economic activity, suspension of work due to bad weather, mechanical
breakdowns, lack of materials, fuels or power, or other temporary absence with or without leave,

— those working abroad if they continue to receive remuneration from the reporting unit,

— outworkers (2), including home workers and teleworkers if there is an explicit agreement that such workers
are remunerated on the basis of the work done: that is, the amount of labour which is contributed as an
input into some process of production.

The following categories should be excluded:

— sales representatives and other persons who are wholly remunerated by way of fees or commission, are not

on the payroll, or are self-employed,

— owners, directors or managers whose remuneration wholly takes the form of a share in profits,

— family workers who are not employees (as defined above) of the enterprise or local unit,

— own-account workers,

— unpaid voluntary workers (e.g. those who typically work for non-profit institutions such as charities).

2.1.

Sex

The transmission codes for the two categories are set out by Eurostat in an implementation paper.

2.2.

Age

Only the year of birth is to be given here. The age is then calculated as the difference between the reference year
of the survey and the year of birth.

2.3.

Occupation in the reference month (ISCO-88 (COM))

The occupation is to be coded according to the International Standard Classification of Occupations, 1988
version (ISCO-88 (COM)) at the two-digit level and, if possible, at the three-digit level. The essential information
for determining the occupation is usually the employee’s job title and a description of the main tasks undertaken
in the course of his/her duties.

Trainees or students with an employment contract and apprentices are classified in the occupation for which
they carry out their apprenticeship or training period. Foremen are also classified in the occupation in which they
supervise.

The transmission codes for the categories of variable 2.3 are set out by Eurostat in an implementation paper.

(1) To avoid double counting, the hours worked by persons employed by employment agencies are to be included in the NACE category
of the employment agency (NACE Rev. 1.1, 74.50) and not in the NACE category of the enterprise for which they actually work.
(2) An outworker is a person who agrees to work for a particular enterprise or to supply a certain quantity of goods or services to a
particular enterprise by prior arrangement or contract with that enterprise, but whose place of work is not within it (European system
of national and regional accounts in the European Community, ESA 95: 11.13(g).

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2.4.

Managerial or supervisory position (optional)
This binary variable (categories ‘yes’/‘no’)
indicates whether an employee has some form of managerial or
supervisory function. The word ‘managerial’
is not identical to ‘supervisory’ because some managers do not
supervise other employees. Further, employees who do have a ‘supervisory’ position do not belong exclusively to
ISCO-88 (COM), major group 1 (legislators, senior officials and managers). Many employees coded to group 2
(professionals) and group 3 (technicians and associate professionals) may have supervisory responsibilities. A
supervisory position can occur in any of the ISCO-88 (COM) groups, including manual workers.

Managerial functions are related to determining, formulating, implementing, directing or advising policies and
activities of enterprises or institutions. They often include supervisory responsibilities.

A person is considered to have a supervisory position when he or she supervises the work of at least one person
(other than apprentices). Typically such a person might have a job title/description of ‘foreman’ or ‘supervisor’
together with the name of the occupation.

The transmission codes for the two categories are set out by Eurostat in an implementation paper.

2.5.

Highest successfully completed level of education and training (ISCED 97)

This variable concerns the level of general, professional or higher education which the employee has received
according to the International Standard Classification of Education, 1997 version (ISCED 97). The expression
‘level successfully completed’ must be associated with obtaining a certificate or a diploma, when there is
certification.
In cases where there is no certification, successful completion must be associated with full
attendance.

The following ISCED 97 levels should be distinguished:

I S C E D 0 a n d 1 ( c o d e 0 1 ) : Pre-primary education and primary education or first stage of basic education

Programmes at this level are normally designed on a unit or project basis to give children a sound basic
education in reading, writing and mathematics along with an elementary understanding of other subjects
such as history, geography, natural science, social science, art and music. This level usually covers six years of
full-time schooling.

I S C E D 2 ( c o d e 0 2 ) : Lower secondary education or second stage of basic education

The programmes at this level usually follow a more subject-oriented pattern, using more specialised teachers and
often several teachers conducting classes in their field of specialisation. The full implementation of basic skills
occurs at this level.

I S C E D 3 a n d 4 ( c o d e 0 3 ) : Upper secondary and post-secondary non-tertiary education

The educational programmes at upper secondary level (ISCED 3) typically require the completion of some nine
years of full-time education since the beginning of ISCED level 1, or a combination of education and vocational
or technical experience.

Post-secondary non-tertiary education (ISCED 4) captures programmes that straddle the boundary between
upper-secondary and post-secondary education from an international point of view, even though they might
clearly be considered as upper-secondary or post-secondary programmes in a national context. From the point of
view of their content these programmes cannot be regarded as tertiary programmes. They are often not
significantly more advanced than programmes at ISCED level 3, but they serve to broaden the knowledge of
participants who have already completed a programme at ISCED level 3. Typical examples are programmes
designed to prepare students for studies at ISCED level 5 who, although having completed ISCED level 3, did not
follow a curriculum which would allow entry to level 5, i.e. pre-degree foundation courses or short vocational
programmes. Second-cycle programmes may be included as well.

I S C E D 5 B ( c o d e 0 4 ) : First stage of tertiary education (not leading to an advanced research qualification)

— Technical

Unlike 5A, these programmes are practically oriented/occupationally specific, and are mainly designed to enable
participants to acquire the practical skills and know-how needed for employment in a particular occupation or
trade or class of occupations or trades, the successful completion of which usually provides the participants with
a labour-market relevant qualification.

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I S C E D 5 A ( c o d e 0 5 ) : First stage of tertiary education (not leading to an advanced research qualification)

— General

This level consists of tertiary programmes having an educational content more advanced than those offered at
ISCED levels 3 and 4. Entry to these programmes normally requires the successful completion of ISCED level 3
or a similar qualification at ISCED level 4. They do not lead to the award of an advanced research qualification.
These programmes must have a cumulative duration of at least two years. 5A programmes are largely theore-
tically based and are intended to provide sufficient qualifications for gaining entry into advanced research
programmes and professions with high skills requirements.

I S C E D 6 ( c o d e 0 6 ) : Second stage of tertiary education (leading to an advanced research qualification)

This level is reserved for tertiary programmes which lead to the award of an advanced research qualification. The
programmes are therefore devoted to advanced study and original research and not based on coursework only.
They typically require the submission of a thesis or dissertation of publishable quality which is the product of
original research and represents a significant contribution to knowledge.

The transmission codes for the categories of variable 2.5 listed above are set out by Eurostat in an implemen-
tation paper.

2.6.

Length of service in the enterprise

The total length of service in the reference month should be based on the number of completed years of service.
Any point of time during the reference month will suffice as a qualifying date (e.g. 1 or 31 October). The total
length of service relates to the period since the employee joined the enterprise, which may have been in another
local unit. Career breaks will not be subtracted. Where enterprises have been merged or there have been changes
of ownership, the length of service is to be recorded as counted by the enterprise.

Size bands for variable 2.6 and transmission codes for the bands are set out by Eurostat in an implementation
paper.

2.7.

Contractual working time (full-time or part-time)

Full-time employees are those whose normal working hours are the same as the collectively agreed or customary
hours worked in the local unit under consideration, even if their contract is for less than one year. Part-time
employees are those who work fewer hours than the normal working hours of full-time employees.

The transmission codes for the two categories of variable 2.7 are set out by Eurostat in an implementation paper.

2.7.1.

S h a r e o f a f u l l - t i m e r ’ s n o r m a l h o u r s

For a full-time employee, this share is always 100 %. For a part-time employee, the hours contractually worked
should be expressed as a percentage of the number of normal hours worked by a full-time employee in the local
unit (in an job equivalent to that of the part-time employee).

2.8.

Type of employment contract

The following information on the type of employment contract is requested:

— indefinite duration,

— temporary/fixed duration (except apprentices, including trainees or students receiving remuneration),

— apprentice.

An indefinite duration contract of employment is a contract between the employee and the employer, for which the
actual duration of the contract has not been agreed in advance.

An employment contract is regarded as temporary or of fixed duration if it was the intention of the employer and
employee that the duration of the contract was to be determined by certain conditions such as a definite time
schedule for the completion of the work, the completion of a certain task, or the return to work of an another
employee who was currently being replaced. Trainees and students who are paid for their work belong to this
category.

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Apprenticeship contracts are specific fixed-duration contracts drawn up between the employer and the apprentice.
The purpose of the contract is to enable the apprentice to acquire practical experience in a specific field.

The transmission codes for the three categories of variable 2.8 are set out by Eurostat in an implementation
paper.

2.9.

Citizenship (optional)

Citizenship is defined as the legal nationality of each person, and a citizen is a person who is a legal national by
birth or naturalisation, whether by declaration, option, marriage or other means.

One of the following should be selected:

— resident with citizenship,

— resident with foreign citizenship,

— commuter from another country.

The transmission codes for the three categories of variable 2.9 are set out by Eurostat in an implementation
paper.

3.

Information on working periods for each employee in the sample

The following variables relating to time are used for calculating the number of hours paid. The latter are defined
as:

— normal and overtime hours remunerated during the reference period,

— any hours for which the employee was paid at a reduced rate, even if the difference was made up of

payments from social-security funds,

— hours not worked during the reference period but nevertheless paid (annual holidays/vacation, absence due to
sickness, public holidays and other hours paid, including time off for medical examinations, births, weddings,
funerals, moving house, etc.).

3.1.

Number of weeks to which the gross annual earnings relate
Variable 3.1 refers to the employee’s working time actually paid during the year and should correspond to the
actual gross annual earnings (variable 4.1). It will be used to gross up the actual gross annual earnings and the
annual bonuses and allowances where the employee has worked for less than a full year, i.e. less than 52 weeks.

Part-time employees should be treated like full-time employees, irrespective of the hours worked. If a part-timer
has been paid for a full year, insert ‘52’ weeks. If a part-timer has been paid for 6 months, insert ‘26’ weeks.

3.2.

Number of hours actually paid during the reference month

What is required here is the number of hours actually paid during the reference month, not the number of hours
in a standard working month. Hours actually paid include all normal and overtime hours worked and remun-
erated by the employer during the month. Hours not worked but nevertheless paid are counted as ‘paid hours’
(e.g. for annual leave, public holidays, paid sick leave, paid vocational training, paid special leave etc.).

Variable 3.2 should be consistent with the gross earnings for the reference month (variable 4.2). This implies that
hours paid by the employer at a reduced rate for periods of absence are not counted.

If the employee’s paid hours are affected by unpaid absence, then they should be adjusted to obtain paid hours
for a full month. If, for example, the information is available that an employee had 20 % of the reference month
as unpaid absence, variable 3.2 will be multiplied by the correction factor 1,25.

3.2.1. N u m b e r o f o v e r t i m e h o u r s p a i d i n t h e r e f e r e n c e m o n t h

Overtime hours include those worked in addition to those of the normal or conventional working month. If, for
example, four hours are paid at a rate of 1,5 times the normal rate, enter 4, not 6. Only those overtime hours
corresponding to overtime pay registered in 4.2.1 should be included. Hence, variable 3.2.1 should be consistent
with overtime earnings in the reference month (variable 4.2.1). Time off in lieu of unpaid work periods and
travel time are not regarded as overtime.

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The adjustment procedure applied to variable 3.2 implies that the grossing-up procedure also concerns the
variable 3.2.1, which is a component of 3.2. If, for example, it is known that an employee had 20 % of the
reference month as unpaid absence, variable 3.2.1 should be multiplied by the correction factor 1,25.

3.3.

Annual days of holiday leave

This refers to the total number of paid annual holidays, excluding sick leave and public holidays, expressed in
days. It relates to the annual total of all normal paid-leave days, including those granted to the employee on the
grounds of age, performance of special duties, seniority etc.

It is recognised that many employers are unable to state the number of holidays actually taken by the employee
during the year. For this reason variable 3.3 refers to annual holiday entitlement, which acts as a proxy for annual
holidays actually taken.

The following are not regarded as holidays:

— sick leave,

— training leave,

— paid special leave granted for personal reasons,

— additional time off granted under working-time reduction agreements.

For purposes of comparison, each week of holiday corresponds to five days. Saturdays and Sundays should not
if a full-time employee is normally entitled to five weeks’ annual holiday, this
be included. For example,
corresponds to 25 days.

In contrast, five weeks’ holiday entitlement for a part-timer who works 60 % of the normal full-timer’s hours
(variable 2.7.1) represents an entitlement to only 15 ‘full’ days of leave.

3.4.

Other annual days of paid absence (optional)

This variable is again expressed in days. It includes, for example:

— the total number of paid sick leave days actually taken during the year,

— paid special leave granted for personal reasons,

— public holidays.

It excludes paid days which are treated as being equivalent to days actually worked, such as paid annual days
spent by the employee on vocational training.

4.

Information on earnings for each employee in the sample

The employees to be included in all the following variables on annual, monthly and hourly earnings are those
who actually received remuneration during the reference month. Employees who did not receive remuneration in
the reference month should be excluded.

Further, if the employee’s gross earnings in the reference month (variable 4.2) are affected by unpaid absence
(due to sickness, maternity or study leave, etc.) and cannot be suitably adjusted in order to provide a satisfactory
estimate of the employee’s earnings for a full month, then that employee should also be excluded.

The grossing-up factor for employees (variable 5.2) should strictly relate to those sampled employees for whom
soundly-based estimates of gross monthly earnings can be provided.

4.1.

Gross annual earnings in the reference year

Gross annual earnings cover remuneration in cash and in kind paid during the reference year before any tax
deductions and social-security contributions payable by wage earners and retained by the employer.

The main difference between annual and monthly earnings is that annual earnings are not only the sum of the
direct remuneration, bonuses and allowances paid to an employee in each pay period. Annual earnings hence
usually exceed the figure produced by multiplying the ‘standard monthly package’ by 12.

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The ‘standard monthly package’ includes those bonuses and allowances which occur in every pay period, even if
the amount for these ‘regular’ bonuses and allowances varies, but excludes bonuses and allowances not occurring
in every pay period. Furthermore, monthly earnings leave payments in kind out of consideration. However,
annual earnings also cover all ‘non-standard payments’, i.e. payments not occurring in each pay period (variable
4.1.1), and payments in kind (variable 4.1.2).

Data for variable 4.1 should be provided for all employees for whom gross monthly earnings (variable 4.2) can
be supplied, i.e. variable 4.1 should not be provided for employees for whom an estimate of an employee’s gross
monthly earnings is not feasible. These employees will be excluded from the sample.

It does not matter if the employee’s earnings do not always relate to a full year. Some employees will have
periods of unpaid absence, or will have joined or left the enterprise during the year. The actual gross earnings in
the reference year are required. When variable 3.1 (number of weeks to which the annual earnings relate) is less
than 52 weeks, variable 3.1 will be used to gross up variable 4.1 and its components.

4.1.1. A n n u a l b o n u s e s a n d a l l o w a n c e s n o t p a i d a t e a c h p a y p e r i o d

This variable covers items which do not occur each pay period, such as:

— 13th or 14th month pay,

— holiday bonuses,

— quarterly or annual company bonuses,

— productivity bonuses depending on pre-set targets, employee recognition awards, recruitment incentives,

— leaving or retirement bonuses,

— back-dated arrears.

4.1.2. A n n u a l p a y m e n t s i n k i n d ( o p t i o n a l )

This variable refers to an estimate of the value of all goods and services made available to employees through the
enterprise or local unit during the reference year. Included are company products, staff housing, company cars,
stock options and share purchase schemes. If information is available from personal income taxation on wages
and salaries in kind, this may be used as a proxy.

When variable 3.1 is less than 52 weeks, do not adjust variable 4.1.2.

4.2.

Gross earnings for the reference month

This variable covers remuneration in cash paid during the reference month before any tax deductions and social-
security contributions payable by wage earners and retained by the employer. Variable 4.2 should be consistent
with the number of hours paid during the reference month (variable 3.2).

The following elements are included:

— all payments relating to this period (even if actually paid outside the representative month), including any

overtime pay, shift premium, bonus, commission, etc.,

— payments for overtime, allowances for teamwork, night work, weekend work, commissions etc.,

— bonuses and allowances paid regularly in each pay period, even if the amount varies monthly,

— payments for periods of absence and work stoppage paid for entirely by the employer,

— family allowances and other gratuities in cash fixed by collective agreements or voluntarily agreed,

— payments to employees’ savings scheme.

The following are excluded:

— payments paid in this period but relating to other periods, such as arrears, advances or pay for holiday or

sickness absences outside this period,

— periodic bonuses and gratuities not paid regularly at each pay date,

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— payments for periods of absence paid by the employer at a reduced rate,

— statutory family allowances,

— allowances for work clothes or tools,

— reimbursements or payments for travel, subsistence etc., and expenses incurred in carrying out the employer's

business,

— payments in kind.

Where the employee’s gross monthly earnings are affected by unpaid absence (due to sickness, maternity or
study leave etc. or simply because the employee joined or left the enterprise during the reference month), then
the earnings should be suitably adjusted in order to provide an estimate of the employee’s earnings for a full
month. Where it is not feasible to adjust the employee’s monthly earnings so that the estimated figure corres-
ponds to a full month’s earnings, then the employee should be excluded from the sample.

4.2.1.

E a r n i n g s r e l a t e d t o o v e r t i m e

The amount of overtime earnings paid for overtime hours. The full rate should be counted, not just the premium
element added to the normal hourly rate. Variable 4.2.1 should be consistent with variable 3.2.1 (number of
overtime hours paid in the reference month).

4.2.2.

S p e c i a l p a y m e n t s f o r s h i f t w o r k

This relates to the special premium payments for shift work, night work or weekend work where these are not
treated as overtime. The amount to include is the premium element or supplementary payment, not the total
payment for such shift work.

4.2.3.

C o m p u l s o r y s o c i a l c o n t r i b u t i o n s a n d t a x e s p a i d b y t h e e m p l o y e r o n b e h a l f o f
t h e e m p l o y e e ( o p t i o n a l )

This variable refers to the total amount of compulsory social contributions and taxes paid by the employer on
behalf of the employee to government authorities during the reference month. This information is requested in
order to obtain net monthly earnings for each employee (see the figure ‘Variables on earnings’ at the end of
Annex I).

If the employee’s monthly earnings are affected by unpaid absence, then variable 4.2.3 (together with its sub-
components 4.2.3.1 and 4.2.3.2) should be adjusted to obtain the estimated deductions for a full month.

4.2.3.1. C o m p u l s o r y s o c i a l - s e c u r i t y c o n t r i b u t i o n s ( o p t i o n a l )

This refers to the amount of the employee’s social security contribution laid down by law or by collective
agreements and withheld by the employer.

4.2.3.2. T a x e s ( o p t i o n a l )

This refers to the amount of all taxes on the employee’s earnings withheld by the employer for the reference
month and paid by the employer to the tax authorities on behalf of the employee.

4.3.

Average gross hourly earnings in the reference month

The figure required is the average gross earnings per hour paid to the employee in the reference month. This
figure should be consistent with the average gross hourly earnings derived from gross earnings for the reference
month (variable 4.2) divided by the number of hours paid during the same period (variable 3.2).

5.

Grossing-up factors

The data collection for the structure-of-earnings survey usually follows a two-stage sampling scheme. In this case,
the total population of local units is first divided into non-overlapping subpopulations (strata) and a sample of
local units is drawn from each stratum. After that, a sample of employees is drawn from each local unit.

The grossing-up factor 5.1 is needed to draw conclusions from the data collected on the sampled local units to
the population of all
local units in the stratum concerned. Analogously, the grossing-up factor 5.2 allows
conclusions to be drawn from data on sampled employees to the population of all employees in the same
stratum.

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In general, whenever it is decided that the micro-data for an individual business or individual employee should be
withdrawn (for whatever reason) or are not available, then the grossing-up factors should be recalculated by
suitable methods such as calibration,
local units and employees
respectively.

in order to adjust the initial weights of

5.1.

Grossing-up factor for the local unit

The grossing-up factor 5.1 for each local unit is calculated within each sampling stratum. It gives an indication of
the number of local units in the stratum represented by each local unit in the sample. Hence, variable 5.1 is (at
least before applying any method of reweighting the local units) the factor by which the number of local units in
local units in the stratum
the sample needs to be multiplied to obtain estimates for the population of all
concerned.

Whenever it is decided that a local unit should be withdrawn from the sample (owing to non-response, coverage
error, post-stratification etc.), the grossing-up factor 5.1 needs to be recalculated to take account of the local
units excluded.

5.2.

Grossing-up factor for the employees

The grossing-up factor for employees is calculated for each local unit in the sample. Variable 5.2 is (at least
before applying any method for reweighting the initial weights of employees) the factor by which the number of
employees in the sample needs to be multiplied in order to obtain population estimates for the stratum
concerned.

It is essential for the number of employees in the sample drawn from the local unit to be the same as the
number of employees who have received a full month’s remuneration in the reference month. Where it is
necessary to exclude some of the sampled employees who have periods of unpaid absence(s) in the reference
month, then the grossing-up factor 5.2 supplied should be recalculated to take account of the employees
excluded.

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ANNEX III

TRANSMISSION OF RESULTS

The individual data concerning each local unit and each employee should be provided in the form of two types of micro-
data record:

A: records for the local units

B: records for the employees.

The employee records should be linked to the local unit records by a key which does not disclose the identity of the
business. This could be an artificial number or an existing key, provided the same key is used for both the local unit and
the employee records. Additionally, for easy identification of an employee, a key for each employee should be provided
which does not identify the person.

Variables

All items for records A and B should be completed in full. There should be entries for all individual items, including
optional variables (see below). ‘Blank’ information is not acceptable.

Mandatory variables

Complete information should be supplied for all mandatory variables on all micro-data records. Otherwise, the grossing-
up factors supplied will not be suitable for all variables.

Optional variables

These should be coded strictly according to the following rules:

When information is available for an optional variable, data should preferably be provided (as for mandatory variables)
for all observation units or employees.

When information is not available for an optional variable, insert ‘OPT’ for alphanumeric variables and ‘99999999’ for
numeric variables (the number of ‘nines’ corresponds to the length of the field).

Zero values
‘0’: this should strictly be used only for those variables where a zero value may sometimes genuinely occur (e.g. when an
employee has no overtime in the reference month).

Categories for SES variables

The SES variables listed in Annex I are either qualitative or quantitative variables. Most of the variables related to the local
unit and to individual characteristics of the employees are qualitative variables. These SES variables are linked to a limited
number of categories.

The quantitative SES variables are either count variables (number of employees, number of hours, days or weeks) or
variables related to earnings.

The categories of the qualitative SES variables as well as bands for quantitative SES variables are set out by Eurostat in an
implementation paper.

Content of records A and B

The content and sequence of the variables in records A and B and the codes to be used will be specified in separate
documents.

The records should contain one field per variable. Numeric variables should be expressed in absolute terms, that is, giving
the numbers in full (not in decimals, or in tens, hundreds, thousands, millions, etc.). However, because of the need for
precision, the values for variables 4.3, 5.1 and 5.2 should be given to two decimal places.

There is one numeric variable that is different. This is the ‘share of a full-timer’s normal hours’ (variable 2.7.1), which
should be expressed as a percentage and also given to two decimal places, e.g. 43,27.

Where numeric variables relate to money values (e.g. hourly, monthly annual earnings and bonuses, taxes, social-security
contributions, payments in kind), these should be expressed in units of the national currency of the country concerned.

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Transmission

Member States shall transmit to the Commission (Eurostat) the data and metadata required by this Regulation in an
electronic format compliant with an interchange standard proposed by Eurostat. Eurostat will make available detailed
documentation in relation to approved standard(s) and will supply guidelines on how to implement
this (these)
standard(s) according to the requirements of this regulation.