Benefits and Compensation

CPI and Help Wanted Online—More Metrics for Comp Managers

Cost-of-Living Index

Each month, the BLS collects data on prices of a “market basket” of food, clothing, shelter, fuel, prescriptions, transportation fares, medical fees, and other goods and services that people buy for day-to-day living. The BLS measures changes in these costs and reports them in the form of the CPI. The CPI, as defined by the BLS, is a measure of the average change over time in prices paid by urban consumers for this market basket.

The CPI for Urban Consumers (CPI-U) is representative of the buying habits of about 87 percent of the U.S. urban population. The BLS bases the CPI-U on the expenditures of almost all residents of urban or metropolitan areas, including professionals, self-employed, poor, unemployed, and retired persons, as well as urban wage workers and clerical workers.

The CPI market basket is developed from detailed expenditure information provided by families and individuals on what they actually bought. For the current CPI, this information was collected from the Consumer Expenditure Surveys for 2007 and 2008. In each of those years, about 7,000 families from around the country provided information each quarter on their spending habits in an interview survey.

To collect information on frequently purchased items, such as food and personal care products, another 7,000 families in each of these years kept diaries listing everything they bought during a 2-week period. Over the 2-year period, expenditure information came from approximately 28,000 weekly diaries and 60,000 quarterly interviews that were used to determine the importance, or weight, of the more than 200 item categories in the CPI index structure.

Using the Index

The CPI remains useful for calculating relative changes in costs, using the following formula: New index minus old index, divided by old index, converted to a percentage by rounding to 3 digits and multiplying by 100. Thus, if the CPI-U stood at 184.2 in December 2012, up from 178.8 the previous December, the rise in the cost of living from December 2011 to December 2012 was (184.2-178.8) ÷ 178.8 = 5.4/178.8 = 0.030, or 3.0 percent.

Why the CPI Matters

It’s a good idea to keep a close watch on the CPI. Because wages tend to follow changes in the cost of living, it’s a common practice among compensation specialists interested in keeping pay and rate ranges up-to-date to increase them by at least the percentage increase in the CPI. For additional information on CPI statistics, visit the BLS website. Please see the national Consumer Price Index section.

Are class action lawyers peering at your comp practices? It’s likely, but you can keep them at bay by finding and eliminating any wage and hour violations yourself. Our editors recommend BLR’s easy-to-use FLSA Wage & Hour Self-Audit Guide. Try it for 30 days … on us.

Employment Ads (Help Wanted Online)

The Help Wanted Online Data Series (HWOL) is published monthly by The Conference Board, whose website is located at The HWOL measures the number of new, first-time online jobs and jobs reposted from the previous month for over 16,000 Internet job boards, corporate boards, and smaller jobsites that serve niche markets and smaller geographic areas.

The HWOL is not a direct measure of job vacancies. The level of ads in print and online can change for reasons not related to overall job demand. The HWOL began in May 2005. With the September 2008 release, the HWOL began providing seasonally adjusted data for the United States, the nine census regions, and the 50 states. Seasonally adjusted data for occupations were provided beginning with the May 2009 release, and seasonally adjusted data for the 52 largest metropolitan areas began with the February 2012 release.

Trying to keep track of wage-hour data—just one more of the numerous wage and hour challenges all comp pros face. Wage and hour should be simple, but it’s just not. Complying with the Fair Labor Standards Act (FLSA) is one of the most confusing and challenging things comp managers have to do. How can you tell if they are doing it right?

There’s only one way to find out what sort of compensation shenanigans are going on—regular audits.

To accomplish a successful audit, BLR’s editors recommend a unique checklist-based  program called the Wage & Hour Self-Audit Guide. Why are checklists so great? It’s because they’re completely impersonal, and they force you to jump through all the necessary hoops, one by one. They also ensure consistency in how operations are conducted. And that’s vital in compensation, where it’s all too easy to land in court if you discriminate in how you treat one employee over another.

Experts say that it’s always better to do your own audit and fix what needs fixing before authorities do their audit. Most employers agree, but they get bogged down in how to start, and in the end, they do nothing. There are, however, aids to making FLSA self-auditing relatively easy.

What our editors strongly recommend is BLR’s Wage & Hour Self-Audit Guide. It is both effective and easy to use, and it even won an award for those features. Here’s what customers like about it:

  • Plain English. Drawing on 30 years of experience in creating plain-English compliance guides, our editors have translated FLSA’s endless legalese into understandable terms.
  • Step-by-step. The book begins with a clear narrative of what the FLSA is all about. That’s followed by a series of checklists that utilize a simple question-and-answer pattern about employee duties to find the appropriate classification.

All you need to avoid exempt/nonexempt classification and overtime errors, now in BLR’s award-winning FLSA Wage & Hour Self-Audit Guide. Find out more.

  • Complete. Many self-audit programs focus on determining exempt/nonexempt status. BLR’s also adds checklists on your policies and procedures and includes questioning such practices as whether your break time and travel time are properly accounted for. Nothing falls through the cracks because the cracks are covered.
  • Convenient. Our personal favorite feature: a list of common job titles marked “E” or “NE” for exempt/nonexempt status. It’s a huge work saver.
  • Up to Date. If you are using an old self-auditing program, you could be in for trouble. Substantial revisions to the FLSA went into effect in 2004. Anything written before that date is hopelessly—and expensively—obsolete. BLR’s Wage & Hour Self-Audit Guide includes all the changes.

You can examine BLR’s Wage & Hour Self-Audit Guide for up to 30 days at no cost or obligation. Go here and we’ll be glad to arrange it. 

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