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Identifier: 001565188

Date of last update: April 09, 2013

Methodology for the revised hourly cost of labour index - All salaried workers

ICHTrev-TS: presentation

The revised hourly cost of labour index (ICHTrev-TS) is generally used to index contracts. For this reason it cannot be revised subsequently. It covers all economic sectors except agriculture, including a special section focusing on the Electrical and Mechanical Industries (IME). It is a chain-linked Laspeyres index calculated from a base level of 100 in 2008.

ICHTrev-TS tracks the development of:

• salaries,
• national insurance contributions,
• taxes ⁽¹⁾ after subsidies ⁽²⁾.

It is calculated by establishing the ratio between the hourly volume of work and the total cost of the payroll and employer contributions, once allowance has been made for all tax exemptions.

Employer contributions include all company social security charges, solidarity and autonomy contributions, contributions to supplementary pension schemes (Agirc-Arrco) and unemployment insurance. The rates of all of these charges are tracked quarterly.

However ICHTrev-TS does not cover additional agreed charges (except the legal charges payable by all companies).

Subsidies taken into account are those related to wage bill or employment of certain categories of people. The competitiveness and employment tax credit (CICE) is based on the wage bill, it is taken into account in the calculation of the ICHTrev-TS under subsidies received by the employer. It is included in the calculation of the index from the first quarter of 2013, date of entry of CICE on an accrual basis (date of the tax credit operative event).

Two sources

Two sources are used to calculate the ICHTrev-TS:

1. short-term data provided by the Central Agency of Social Security Associations (ACOSS) for data on payrolls, workforces and exemptions from employer contributions.
2. The hourly volume of work is calculated on the basis of the ACEMO survey ⁽³⁾ conducted by the Directorate for Research, Studies, and Statistics (DARES).

Data is not revised from one quarter to the next.

New features of ICHTrev-TS

ICHTrev-TS replaces ICHT-TS, which itself succeeded ICMO (Labour Price Index).

ICHT was a "uniform qualification structure" indicator (i.e. measuring the evolution of the cost of labour without taking into account any changes in the qualification status of different jobs) which charted the evolution of the basic hourly salary and associated company charges and contributions.

L'ICHTrev-TS permet dorénavant de prendre en compte l'ensemble des éléments du salaire (primes, bonus, rémunérations des heures supplémentaires), ainsi que l'augmentation de la structure des qualifications.

ICHTrev-TS covers all aspects of remuneration (including bonuses and overtime), and takes into account any developments in the qualification structure.

Whereas ICHT covered 4 specific sectors (Mechanical and Electrical Industries, textiles, leather/clothing and services provided to businesses), the new indicator is calculated for all 13 sections of the new French Classification of Activities (NAF Rev. 2) document covering the market sector. This indicator is available at a more general NAF level, but it covers a broader range of activities, giving businesses access to a labour cost indicator which more accurately reflects the reality of their specific sector.

A detailed explanation of the NAF rev. 2 Classification is available at the following address:

• French classification of activities - NAF Rev. 2, 2008

Correspondence between series in ICHTrev-TS and ICHT-TS

The former IME ICHT-TS has now been replaced by an equivalent indicator, IME ICHTrev-TS. To extend the previous data series beyond December 2008, multiply figures in the new indicator by an adjustment coefficient of 1.43.

For other indicators which do not have equivalent new series, the adjustment coefficient between an old series (A) and a new one (B) is calculated by applying the index figure from December 2008 in Series A to the same month in Series B. You can then multiply figures from Series B by the adjustment coefficient in order to obtain the corresponding figure for Series A.

Example adjustment calculation for the "Services primarily provided to businesses" sector:

The ICHT-TS index figure for "Services primarily provided to businesses" for December 2008 is 142.0.

If a user wants to connect this series with one of the new series - for example the ICHTrev-TS index for "Support and administrative services", which for December 2008 stood at 100.0 - the adjustment coefficient will be:
142.0 / 100.0 = 1.42

To extend the index into January 2009, multiply the ICHTrev-TS figure for "Support and administrative services" for January 2009, 100.1, by the adjustment coefficient:
100.1 × 1.42 = 142.1

Publication calendar

ICHTrev-TS is a monthly index, but it is published quarterly: the three monthly figures for a given quarter (Q) are published at the beginning of Q+2. However for the IME sector the publication delay is shorter: at the beginning of quarter Q the ICHTrev-TS figures for the last two months of Q-2 and the first month of Q-1 are issued. To obtain this latter figure, an estimate is made on the basis of the latest available data. The estimate is not revised in the next quarter.

Employer contribution index

A monthly index of employer contributions is also calculated quarterly. The methodology used to calculate this index differs in several respects from the method used for the ICT: with the employer contribution index, all three monthly figures for a given quarter are equal and there is no predicted estimate for the IME sector. The employer contribution index measures the evolution of the variable (1+ rate of contributions), where the rate of contributions is the total value of these contributions expressed as a percentage of the gross wage.

ICHTrev-TS and ICT: two labour price indices issued by the INSEE, each with its own distinct objectives

INSEE publishes another quarterly cost of labour index: the ICT. This index is harmonised at European level, designed to reflect the hourly cost of labour (wages and contributions) in France. Unlike ICHTrev-TS, which is used to index contracts, ICT is intended for short-term analysis, and is open to revision.

Retropolation

For the purposes of structural studies, the new ICHTrev-TS index has been extrapolated backwards for the years 2007 and 2008, using the new calculation method. These retropolated indices should not be used for contract indexing purposes. The only method suitable for such calculations is the adjustment coefficient process, explained above.

Revised hourly cost of labour index - All salaried workers - by sector - 2007

Sector	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Mechanical and electrical industries	94.0	94.3	94.5	94.8	95.1	95.4	95.6	95.8	96.1	96.3	96.5	96.7
Mining and extraction	92.6	93.0	93.3	93.6	93.8	94.1	94.3	94.6	94.8	95.2	95.6	95.9
Manufacturing industries	94.4	94.6	94.9	95.2	95.4	95.7	95.9	96.1	96.4	96.6	96.9	97.1
Electricity, gas, steam, air conditioning	93.8	93.9	94.0	94.0	94.0	94.0	94.1	94.3	94.4	94.6	94.7	94.8
Water and sanitation; waste management, depollution	95.2	95.4	95.7	96.1	96.6	97.0	97.2	97.4	97.5	97.7	97.9	98.1
Construction	96.3	96.5	96.7	96.9	97.1	97.2	97.4	97.6	97.8	98.0	98.1	98.3
Trade; repair of automobiles and motorcycles	95.9	96.1	96.3	96.5	96.7	96.9	97.1	97.3	97.5	97.7	97.8	98.0
Transport and delivery	95.3	95.5	95.8	96.1	96.5	96.8	97.0	97.3	97.5	97.7	97.9	98.2
Hotels and restaurants	96.5	96.7	96.9	97.1	97.3	97.5	97.6	97.7	97.8	98.1	98.3	98.6
Information and communication	94.8	94.9	95.0	95.2	95.5	95.7	95.9	96.2	96.5	96.8	97.0	97.3
Financial activities and insurance	93.4	94.3	95.1	95.4	95.7	96.0	96.3	96.6	97.0	97.4	97.9	98.3
Real estate	96.1	96.5	96.8	97.1	97.3	97.6	97.9	98.1	98.4	98.6	98.8	99.0
Specialised scientific and technical activities	93.6	94.0	94.4	94.8	95.1	95.4	95.7	96.0	96.3	96.6	96.9	97.2
Support and administrative services	93.2	93.3	93.5	93.7	93.9	94.1	94.4	94.7	95.0	95.6	96.2	96.8

  Source: INSEE, ACOSS, DARES

Revised hourly cost of labour index - All salaried workers - by sector - 2008

Sector	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Mechanical and electrical industries	97.1	97.4	97.7	98.0	98.3	98.6	98.8	99.1	99.3	99.5	99.8	100.0
Mining and extraction	96.2	96.5	96.8	97.1	97.4	97.6	98.0	98.3	98.7	99.1	99.6	100.0
Manufacturing industries	97.4	97.6	97.9	98.1	98.4	98.7	98.9	99.1	99.3	99.6	99.8	100.0
Electricity, gas, steam, air conditioning	95.5	96.1	96.8	97.0	97.3	97.5	97.9	98.2	98.6	99.0	99.5	100.0
Water and sanitation; waste management, depollution	98.3	98.6	98.9	98.8	98.8	98.8	99.0	99.2	99.5	99.7	99.8	100.0
Construction	98.4	98.5	98.6	98.8	99.0	99.1	99.3	99.4	99.5	99.7	99.8	100.0
Trade; repair of automobiles and motorcycles	98.2	98.4	98.6	98.7	98.9	99.0	99.2	99.3	99.5	99.7	99.8	100.0
Transport and delivery	98.3	98.4	98.5	98.7	98.9	99.0	99.2	99.3	99.5	99.6	99.8	100.0
Hotels and restaurants	98.6	98.6	98.6	98.7	98.8	98.9	99.1	99.2	99.4	99.6	99.8	100.0
Information and communication	97.6	97.9	98.2	98.4	98.7	98.9	99.1	99.3	99.5	99.6	99.8	100.0
Financial activities and insurance	98.3	98.3	98.3	98.5	98.7	98.9	99.1	99.3	99.5	99.7	99.8	100.0
Real estate	99.1	99.3	99.4	99.6	99.7	99.8	99.9	99.9	99.9	99.9	100.0	100.0
Specialised scientific and technical activities	97.6	97.9	98.3	98.6	98.8	99.1	99.3	99.5	99.6	99.8	99.9	100.0
Support and administrative services	97.2	97.5	97.9	98.1	98.4	98.7	99.0	99.2	99.5	99.7	99.8	100.0

  Source;: INSEE, ACOSS, DARES

Footnotes

1. All taxes and duties levied based on the payroll or on work.
2. Subsidies linked to the payroll or the employment of certain specific categories of workers.
3. ACEMO: The Labour Activities and Employment Conditions survey. More details here.

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