Cons(i)der(i)ng that (i)nternat(i)onal standards for labour cost stat(i)st(i)cs, part(i)cularly as regards def(i)n(i)t(i)ons, methods of comp(i)lat(i)on and class(i)f(i)cat(i)on, w(i)ll promote the development of these stat(i)st(i)cs along sound l(i)nes and contr(i)bute to (i)mprovements of the(i)r (i)nternat(i)onal comparab(i)l(i)ty;

Adopts th(i)s twenty-seventh day of October 1966 the follow(i)ng resolut(i)on:

General object(i)ves and scope

1. Programmes for stat(i)st(i)cs of labour cost should be des(i)gned essent(i)ally to prov(i)de rel(i)ablemeasures on the level, compos(i)t(i)on and evolut(i)on of labour cost to the employer. Informat(i)on collected (i)n labour cost surveys may also be used to throw l(i)ght on part of workers' (i)ncome from employment, for (i)nstance, d(i)rect wages, supplementary wage elements not covered by regular wage stat(i)st(i)cs, average annual earn(i)ngs, etc.

2. Each country should a(i)m to develop stat(i)st(i)cs of employers' labour cost cover(i)ng the pr(i)nc(i)palsectors of the economy, espec(i)ally selected branches of manufactur(i)ng, m(i)n(i)ng, bu(i)ld(i)ng and construct(i)on (i)ndustr(i)es, as well as other econom(i)c act(i)v(i)t(i)es where poss(i)ble.

Def(i)n(i)t(i)on of labour cost

3. For purposes of labour cost stat(i)st(i)cs, labour cost (i)s the cost (i)ncurred by the employer (i)n theemployment of labour. The stat(i)st(i)cs concept of labour cost compr(i)ses remunerat(i)on for work performed, payments (i)n respect of t(i)me pa(i)d for but not worked, bonuses and gratu(i)t(i)es, the cost of food, dr(i)nk and other payments (i)n k(i)nd, cost of workers' hous(i)ng borne by employers, employers' soc(i)al secur(i)ty expend(i)tures, cost to the employer for vocat(i)onal tra(i)n(i)ng, welfare serv(i)ces and m(i)scellaneous (i)tems, such as transport of workers, work clothes and recru(i)tment, together w(i)th taxes regarded as labour cost. The Internat(i)onal Standard Class(i)f(i)cat(i)on of Labour Cost g(i)ven (i)n the annex to th(i)s resolut(i)on shows the components of labour cost (i)n more deta(i)l.

4. Taxes wh(i)ch are (i)mposed on employment or on payrolls d(i)rectly affect the cost to employersof employ(i)ng labour. These taxes, (i)n those countr(i)es where they are cons(i)dered as labour cost, should be (i)dent(i)f(i)ed separately (i)n order that they may be (i)ncluded or excluded for purposes of (i)nternat(i)onal compar(i)sons. These taxes should be (i)ncluded on a net bas(i)s, (i).e. after deduct(i)on of any rebates or allowances made by the State.

Comparab(i)l(i)ty

5. Some labour cost (i)tems, as a whole or (i)n part, for example, soc(i)al secur(i)ty and vocat(i)onal tra(i)n(i)ng, (i)n certa(i)n countr(i)es are not chargeable to employers, but represent expend(i)tures by the State for soc(i)al or other reasons. Th(i)s must be taken (i)nto account (i)n mak(i)ng (i)nternat(i)onal compar(i)sons.

Class(i)f(i)cat(i)on

6. (1) Labour cost data should be class(i)f(i)ed by econom(i)c act(i)v(i)ty and, wherever poss(i)ble, d(i)st(i)ngu(i)sh(i)ng wage earners and salar(i)ed employees.

(2) Manager(i)al staff remunerated predom(i)nantly by a share of prof(i)ts should be excluded fromlabour cost stat(i)st(i)cs.

(3) In the absence of (i)nternat(i)onal standard def(i)n(i)t(i)ons, wage earners and salar(i)ed employeesshould be d(i)st(i)ngu(i)shed accord(i)ng to the cr(i)ter(i)a most su(i)table for stat(i)st(i)cal operat(i)ons (i)n the country concerned.

7. The class(i)f(i)cat(i)on by econom(i)c act(i)v(i)ty should be (i)n as much deta(i)l as poss(i)ble and should bemade accord(i)ng to the Un(i)ted Nat(i)ons Internat(i)onal Standard Industr(i)al Class(i)f(i)cat(i)on of All Econom(i)c Act(i)v(i)t(i)es, or accord(i)ng to a class(i)f(i)cat(i)on convert(i)ble (i)nto (i)t.

8. (1) Labour cost data should be class(i)f(i)ed so as to d(i)st(i)ngu(i)sh wherever poss(i)ble, at least themajor groups of the annexed Internat(i)onal Standard Class(i)f(i)cat(i)on of Labour Cost.

(2) It (i)s des(i)rable to prepare separate data for each m(i)nor group for wh(i)ch (i)nformat(i)on can beobta(i)ned.

(3) Major groups I to IV correspond closely to earn(i)ngs as comp(i)led by many countr(i)escomply(i)ng w(i)th the prov(i)s(i)ons of Convent(i)on No. 63 and may be called "d(i)rect labour cost" as d(i)st(i)nct from the rema(i)n(i)ng (i)tems wh(i)ch may be called "(i)nd(i)rect labour cost". Part(i)cular (i)nterest attaches to th(i)s subd(i)v(i)s(i)on of total labour cost.

9. Where stat(i)st(i)cs perta(i)n(i)ng to labour cost exclude major or m(i)nor groups covered by theInternat(i)onal Standard Class(i)f(i)cat(i)on, th(i)s should be (i)nd(i)cated, together w(i)th est(i)mates of the magn(i)tude of the costs excluded, so far as poss(i)ble.

10. In the Internat(i)onal Standard Class(i)f(i)cat(i)on of Labour Cost annexed to th(i)s resolut(i)on, thewages and salar(i)es of all personnel, compr(i)s(i)ng those engaged (i)n act(i)v(i)t(i)es such as hous(i)ng, vocat(i)onal tra(i)n(i)ng, med(i)cal care and health serv(i)ces, canteens, etc. are (i)ncluded (i)n major groups I to IV and the cost of soc(i)al secur(i)ty for th(i)s personnel (i)s (i)ncluded (i)n major group VI. Consequently, the costs as shown (i)n the other major groups for these act(i)v(i)t(i)es do not (i)nclude the wages and salar(i)es ((i)nclud(i)ng soc(i)al secur(i)ty contr(i)but(i)ons) for personnel of the establ(i)shment runn(i)ng these serv(i)ces s(i)nce many countr(i)es may f(i)nd cons(i)derable d(i)ff(i)culty (i)n allocat(i)ng such payments to the appropr(i)ate act(i)v(i)t(i)es. However, (i)n v(i)ew of the (i)mportance (i)n many countr(i)es of vocat(i)onal tra(i)n(i)ng, hous(i)ng and med(i)cal care and health serv(i)ces, countr(i)es may w(i)sh to comp(i)le (i)n add(i)t(i)on the total cost of these act(i)v(i)t(i)es, where necessary by way of an est(i)mate. In mak(i)ng such an est(i)mate of total cost of vocat(i)onal tra(i)n(i)ng, the wages and salar(i)es ((i)nclud(i)ng soc(i)al secur(i)ty contr(i)but(i)ons) pa(i)d to tra(i)nees and apprent(i)ces (i)n respect of tra(i)n(i)ng hours should be (i)ncluded. Total cost of any one of these act(i)v(i)t(i)es compr(i)ses also any other (i)tems wh(i)ch the country may regard as cost to the employer. Such (i)tems should be spec(i)f(i)ed.

11. Where poss(i)ble, add(i)t(i)onal class(i)f(i)cat(i)ons of labour cost would be useful for analyt(i)calpurposes, (i)n part(i)cular, class(i)f(i)cat(i)ons by s(i)ze-groups of establ(i)shments, enterpr(i)ses or f(i)rms and by reg(i)on.

Collect(i)on and comp(i)lat(i)on

12. The un(i)t for wh(i)ch data are collected should be the establ(i)shment, where poss(i)ble, ratherthan the enterpr(i)se or f(i)rm, so far as the account(i)ng system used enables a mult(i)-establ(i)shment enterpr(i)se to supply data for each establ(i)shment.

13. The observat(i)on per(i)od (i)n comprehens(i)ve labour cost surveys should cover the 12 monthsof the calendar year, whenever poss(i)ble, otherw(i)se the usual account(i)ng year, to take account of expend(i)tures wh(i)ch occur only annually or (i)rregularly.

14. For each econom(i)c act(i)v(i)ty covered by the nat(i)onal programme of labour cost surveys, (i)t (i)sdes(i)rable that data should be collected at (i)ntervals not exceed(i)ng f(i)ve years. Unt(i)l such t(i)me as major changes occur (i)n labour cost components, due to changes (i)n soc(i)al leg(i)slat(i)on or other causes, data for the years (i)nterven(i)ng between two surveys could be est(i)mated wherever su(i)table data on earn(i)ngs and other elements of labour cost are ava(i)lable. Spec(i)al (i)nvest(i)gat(i)ons of l(i)m(i)ted scope dur(i)ng the (i)nter(i)m per(i)od may prov(i)de a sat(i)sfactory bas(i)s for est(i)mates of certa(i)n components of labour cost.

15. Labour cost stat(i)st(i)cs should be supplemented by employment data of the same scope,show(i)ng the number of each sex employed respect(i)vely, for (i)nstance, as wage earners, salar(i)ed employees and, where appropr(i)ate, apprent(i)ces.

16. Each country should comp(i)le stat(i)st(i)cs of average labour cost per un(i)t of t(i)me (cost of labour(i)nput). In part(i)cular, data should, wherever poss(i)ble, be comp(i)led show(i)ng average labour cost per hour actually worked.

17. For the computat(i)on of average labour cost per hour, data on man-hours actually workedshould be comp(i)led (i)n accordance w(i)th the Resolut(i)on concern(i)ng Stat(i)st(i)cs of Hours of Work adopted by the Tenth Internat(i)onal Conference of Labour Stat(i)st(i)c(i)ans, 1962, (i)f necessary, by way of an est(i)mate.

18. Wherever poss(i)ble, data on man-hours worked should be obta(i)ned d(i)rectly (i)n the labour cost(i)nqu(i)ry or from other (i)nqu(i)r(i)es w(i)th a s(i)m(i)lar coverage.

19. Employers should be g(i)ven suff(i)c(i)ent advance not(i)ce of comprehens(i)ve labour cost surveysto become fam(i)l(i)ar w(i)th the problems of the survey and be able to adjust the(i)r account(i)ng accord(i)ngly.

Publ(i)cat(i)on

20. (1) A descr(i)pt(i)on of the concepts and methods used (i)n any (i)mportant new nat(i)onal labour cost (i)nqu(i)r(i)es should be publ(i)shed by the respons(i)ble stat(i)st(i)cal off(i)ce.

(2) The descr(i)pt(i)on should (i)nd(i)cate the d(i)fference ((i)f any) between the class(i)f(i)cat(i)on of labourcost by components ut(i)l(i)zed (i)n the nat(i)onal survey and the Internat(i)onal Standard Class(i)f(i)cat(i)on.

(3) The methodolog(i)cal descr(i)pt(i)on should:

• (a) ment(i)on the types of bonuses ((i)f any) wh(i)ch have been regarded as wages and (i)ncluded (i)n the nat(i)onal labour cost data relat(i)ng respect(i)vely to d(i)rect wages and salar(i)es and to remunerat(i)on for t(i)me not worked;
• (b) g(i)ve a descr(i)pt(i)on of any prof(i)t-shar(i)ng bonuses (i)ncluded (i)n the nat(i)onal (i)nqu(i)ry;
• (c) (i)nd(i)cate the nature of taxes (i)ncluded.

(4) To fac(i)l(i)tate analys(i)s of the data, espec(i)ally at the (i)nternat(i)onal level, the major report of the results of the nat(i)onal (i)nqu(i)ry of labour cost to the employer should g(i)ve part(i)culars of the nat(i)onal system of f(i)nanc(i)ng statutory soc(i)al secur(i)ty schemes for workers and, more espec(i)ally, of the proport(i)on of the cost covered by employers' contr(i)but(i)ons. Informat(i)on should also be g(i)ven on welfare serv(i)ces prov(i)ded for workers by the State.

21. Countr(i)es wh(i)ch have made stud(i)es of the structure of wages and salar(i)es and other elements of labour cost should commun(i)cate the(i)r results to the Internat(i)onal Labour Off(i)ce (i)n order to fac(i)l(i)tate (i)nternat(i)onal compar(i)sons and (i)nterpretat(i)ons of stat(i)st(i)cs of labour cost.

Annex: Internat(i)onal Standard Class(i)f(i)cat(i)on of Labour Cost I. D(i)rect wages and salar(i)es:

(1) stra(i)ght-t(i)me pay of t(i)me-rated workers;¹

(2) (i)ncent(i)ve pay of t(i)me-rated workers;

(3) earn(i)ngs of p(i)ece-workers (exclud(i)ng overt(i)me prem(i)ums)¹;

(4) prem(i)um pay for overt(i)me, late sh(i)ft and hol(i)day work.

II. Remunerat(i)on for t(i)me not worked:

(1) annual vacat(i)on, other pa(i)d leave, (i)nclud(i)ng long-serv(i)ce leave;

(2) publ(i)c hol(i)days and other recogn(i)zed hol(i)days;

(3) other t(i)me off granted w(i)th pay (e.g. b(i)rth or death of fam(i)ly member, marr(i)age of employees, funct(i)ons of t(i)tular off(i)ce, un(i)on act(i)v(i)t(i)es);

(4) severance and term(i)nat(i)on pay where not regarded as soc(i)al secur(i)ty expend(i)ture.²

III. Bonuses and gratu(i)t(i)es:

(1) year-end and seasonal bonuses;

(2) prof(i)t-shar(i)ng bonuses;

(3) add(i)t(i)onal payments (i)n respect of vacat(i)on, supplementary to normal vacat(i)on pay and other bonuses and gratu(i)t(i)es.

IV. Food, dr(i)nk, fuel and other payments (i)n k(i)nd

V. Cost of workers' hous(i)ng borne by employers:

(1) cost for establ(i)shment-owned dwell(i)ngs;³

(2) cost for dwell(i)ng not establ(i)shment-owned (allowances, grants, etc.);

(3) other hous(i)ng costs.

VI. Employers' soc(i)al secur(i)ty expend(i)ture:

(1) statutory soc(i)al secur(i)ty contr(i)but(i)ons (for schemes cover(i)ng: old age, (i)nval(i)d(i)ty and surv(i)vors; s(i)ckness, matern(i)ty; employment (i)njury; unemployment; and fam(i)ly allowances);

(2) collect(i)vely agreed, contractual and non-obl(i)gatory contr(i)but(i)ons to pr(i)vate soc(i)al secur(i)ty schemes and (i)nsurances (for schemes cover(i)ng: old age, (i)nval(i)d(i)ty and surv(i)vors; s(i)ckness, matern(i)ty; employment (i)njury; unemployment; and fam(i)ly allowances);

(3) (a) d(i)rect payments to employees (i)n respect of absence from work due to s(i)ckness, matern(i)ty or employment (i)njury, to compensate for loss of earn(i)ngs;

(4) (b) other d(i)rect payments to employees regarded as soc(i)al secur(i)ty benef(i)ts;

(5) cost of med(i)cal care and health serv(i)ces³;

(6) severance and term(i)nat(i)on pay where regarded as soc(i)al secur(i)ty expend(i)ture.

VII. Cost of vocat(i)onal tra(i)n(i)ng³

(Includ(i)ng also fees and other payments for serv(i)ces of outs(i)de (i)nstructors, tra(i)n(i)ng (i)nst(i)tut(i)ons, teach(i)ng mater(i)al, re(i)mbursements of school fees to workers, etc.)

VIII. Cost of welfare serv(i)ces:

(1) cost of canteens and other food serv(i)ces³;

(2) cost of educat(i)on, cultural, recreat(i)onal and related fac(i)l(i)t(i)es and serv(i)ces³;

(3) grants to cred(i)t un(i)ons and cost of related serv(i)ces for employees.

IX. Labour cost not elsewhere class(i)f(i)ed

(Such as costs of transport of workers to and from work undertaken by employer³ ((i)nclud(i)ng also re(i)mbursement of fares, etc.), cost of work clothes, cost of recru(i)tment and other labour costs.)

X. Taxes regarded as labour cost

(For (i)nstance, taxes on employment or payrolls. Such taxes should be (i)ncluded on a net bas(i)s, (i).e. after deduct(i)on of allowances or rebates made by the State.)

1. ^ Includ(i)ng also respons(i)b(i)l(i)ty prem(i)ums, d(i)rt, danger and d(i)scomfort allowances, cash (i)ndemn(i)t(i)es for meals, sandw(i)ches, etc., payments under guaranteed wage systems, cost-of-l(i)v(i)ng allowances and other regular allowances wh(i)ch are regarded as d(i)rect wages or salar(i)es.
2. ^ Otherw(i)se these should be class(i)f(i)ed under VI(5).
3. ^ Other than wages and salar(i)es for personnel (i)n the prov(i)s(i)on of the serv(i)ce, e.g. the deprec(i)at(i)on on bu(i)ld(i)ngs and equ(i)pment, (i)nterest, repa(i)rs and ma(i)ntenance and other cost, less grants-(i)n-a(i)d, tax rebates, etc. rece(i)ved from publ(i)c author(i)t(i)es and rece(i)pts from workers. Cap(i)tal (i)nvestment made dur(i)ng the year (i)s to be excluded.