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Employment Development Department
Employment Development Department

Quarterly Census of Employment and Wages (QCEW - About the Data)

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Introduction
The Quarterly Census of Employment and Wages (QCEW) Program is a federal/state cooperative program between the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) and the California EDD’s Labor Market Information Division (LMID). The QCEW program produces a comprehensive tabulation of employment and wage information for workers covered by California Unemployment Insurance (UI) laws and Federal workers covered by the Unemployment Compensation for Federal Employees (UCFE) program.

The QCEW program serves as a near census of monthly employment and quarterly wage information by 6-digit industry codes from the North American Industry Classification System (NAICS) at the national, state, and county levels. At the national level, the QCEW program publishes employment and wage data for nearly every NAICS industry. At the state and local area level, the QCEW program publishes employment and wage data down to the 6-digit NAICS industry level, if disclosure restrictions are met. In accordance with the BLS policy, data provided to the Bureau in confidence are used only for specified statistical purposes and are not published. The BLS withholds publication of Unemployment Insurance law-covered employment and wage data for any industry level when necessary to protect the identity of cooperating employers.

Data from the QCEW program serve as an important input to many BLS programs. The Current Employment Statistics and the Occupational Employment Statistics programs use the QCEW data as the benchmark source for employment. The UI administrative records collected under the QCEW program serve as a sampling frame for the BLS establishment surveys.

In addition, the data serve as an input to other federal and state programs. The Bureau of Economic Analysis (BEA) of the Department of Commerce uses the QCEW data as the base for developing the wage and salary component of personal income. The U.S. Department of Labor’s Employment and Training Administration (ETA) and California's EDD use the QCEW data to administer the Unemployment Insurance program. The QCEW data accurately reflect the extent of coverage of California’s UI laws and are used to measure UI revenues; national, state and local area employment; and total and UI taxable wage trends.

The U.S. Department of Labor’s Bureau of Labor Statistics publishes new QCEW data in its County Employment and Wages news release on a quarterly basis. The BLS also publishes a subset of its quarterly data through the Create Customized Tables system, and full quarterly industry detail data at all geographic levels.

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Characteristics of the Data
These data are compiled as part of the operation of the QCEW program. The data are derived from the quarterly tax reports submitted to the EDD by California employers subject to the state’s UI laws and from federal agencies subject to the Unemployment Compensation for Federal Employees (UCFE) program. Each quarter, the EDD edits and processes the data and sends the information to the U.S. Department of Labor’s Bureau of Labor Statistics.

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Industry Classification
Employment and wage data under the QCEW program have been classified by industry since 1938. The state agency, based on the description provided by the employer on an Initial Registration form (DE 1), assigns an industry code to each establishment. If a private or government employer conducts different activities at various establishments or installations, separate industry codes are assigned, to the extent possible, to each establishment.

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North American Industry Classification System (NAICS)
The North American Industry Classification System (NAICS) is the product of a collaborative effort between the United States, Canada, and Mexico. Sharing a common classification system between these three countries allows direct comparison of economic data across borders in North America.

The NAICS uses a production-oriented approach to categorize economic units. Units with similar production processes are classified in the same industry. The NAICS focuses on how products and services are created. The NAICS is updated every five years with the most recent revision in 2012.

For more information about NAICS, see the U.S. Census Bureau website at: http://www.census.gov/eos/www/naics/index.html

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Verification of Account Information
To ensure the highest possible quality of data, the EDD verifies and updates, as necessary, the NAICS, physical location address, and ownership codes of all establishments on a three-year cycle known as the Annual Refile Survey (ARS). Each year, changes in establishment classification codes resulting from the verification process are introduced with the data reported for the first quarter.

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How to Request a NAICS Code Change
The Employer Classification Unit within the EDD is responsible for assigning and reviewing NAICS codes. In the event an employer does not agree with a coding determination or has not received an assigned NAICS code, they can request an update by writing a letter on their company letterhead. The individual who signs the letter must be an authorized agent of the employer.

The following information must be included in the letter:

The Employer Classification Unit will review the request, make any necessary changes, and follow-up in writing within 10 working days. For business purposes, all updated or newly assigned NAICS codes can be used immediately.

Please fax written requests to (916) 651-5771.

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Employment
Employment data under the QCEW program represents the number of the state’s UI covered workers who worked during, or received pay for, the pay period which includes the 12th of the month. Excluded are members of the armed forces, the self-employed, proprietors, domestic workers, and unpaid family workers. Railroad workers covered by the Railroad Unemployment Insurance system are also excluded. Wages represent total compensation paid during the calendar quarter, regardless of when services were performed. Included in wages is compensation for vacation and other paid leave, bonuses, stock options, tips, the cash value of meals, and lodging.

Workers on the payroll of more than one firm during the period are counted by each UI subject employer if they meet the employment definition noted above. Workers are counted even though, in the latter months of the year, their wages may not be subject to unemployment insurance tax. The employment count excludes workers who earned no wages during the entire applicable pay period because of work stoppages, temporary layoffs, illness, or unpaid vacations.

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Establishments
An establishment is an economic unit, such as a farm, mine, factory, or store that produces goods or provides services. It is typically at a single physical location address and engaged in one, or predominantly one type of economic activity for which a single industry classification may be applied. Occasionally, a single physical location address encompasses two or more distinct and significant activities. Each activity should be reported as a separate establishment if separate records are kept and the various activities are classified under different NAICS codes.

Most employers have only one establishment; thus, the establishment is the predominant reporting unit or statistical entity for reporting employment and wages data. Employers who operate more than one establishment in California must file a Multiple Worksite Report (MWR) each quarter, in addition to their quarterly UI report. The MWR form is used to collect separate employment and wage data for each of the employer's establishments, which are not detailed on the UI quarterly report. When the total employment in an employer's secondary establishments (all establishments other than the largest) is 10 or more, the employer must file the MWR.

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Wages
All employers covered under the California UI laws must report their quarterly wages and monthly employment to the EDD using the Quarterly Contribution Return and Report of Wages (DE 9 and DE9C forms). These wages are then used to populate the QCEW database. Wages are reported under the two following definitions.

Total Wages - UI subject employers report total compensation paid during the calendar quarter, regardless of when the services were performed. Under California UI laws, wages include bonuses, stock options, the cash value of meals and lodging, tips and other gratuities. Employer contributions like certain deferred compensation plans such as 401(k) plans may also be included as wages paid.

Covered employer contributions for Disability Insurance (OASDI), health insurance, Unemployment Insurance, Workers' Compensation, and private pension and welfare funds are not reported as wages. Employee contributions for the same purposes, as well as money withheld for income taxes, union dues, and so forth, are reported even though they are deducted from the worker's gross pay.

Wages of covered Federal workers represents the gross amount of all payrolls for all pay periods ending within the quarter. This includes cash allowances, the cash equivalent of any type of remuneration, severance pay, withholding taxes, and retirement deductions. Federal employee remuneration generally covers the same types of services as for workers in private industry.

Average Annual Wages - Average annual wages per employee for any given industry are computed by dividing total annual wages by annual average employment. Annual pay data only approximate annual earnings because an individual may not be employed by the same employer all year or may work for more than one employer at a time. Average annual pay is affected by the ratio of full-time to part-time workers as well as the number of individuals in high-paying and low-paying occupations. When comparing average pay levels between geographic area and industries, these factors should be taken into consideration. For example, industries characterized by high proportions of part-time workers will show average wage levels appreciably less than the pay levels of regular full-time employees in these industries. The opposite effect characterizes industries with low proportions of part-time workers, or industries that typically schedule heavy weekend and overtime work. Average wage data also may be influenced by work stoppages, labor turnover, retroactive payments, seasonal factors, bonus payments, etc.

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Disclosure Restrictions
In accordance with policy, data provided to the QCEW program in confidence are only published as allowed by law and are used only for specified statistical purposes and other purposes under California UI laws. The EDD withholds publication of UI covered employment and wage data for any industry level when necessary to protect the identity of cooperating employers.

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Imputed Data
To reduce the effect of data excluded because of late reporting by UI covered private and government employers, the EDD imputes employment and wages for such employers and includes them in each quarterly report. Corrections to data that may be entered after a report is filed will include replacement of imputations with reported data to the extent possible. Imputations are calculated at the individual establishment level, normally using historical data reported by the employer. If a report remains delinquent for more than one quarter and research shows that it is still active, the establishment will again be imputed.

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Comparison of the QCEW Data With Other Series
The QCEW data are not the official estimates from the California EDD. The official series is available through the Current Employment Statistics (CES) program on this website at Employment by Industry Data.

Differences between the QCEW and the CES include:

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Uses of the Data
The QCEW data are the most complete universe of monthly employment and quarterly wage information by detailed industry at the national, state, Metropolitan Statistical Area (MSA), and county levels. They have broad economic significance in evaluating labor market trends and major industry developments, in time series analyses, and in making industry comparisons.

The Bureau of Economic Analysis (BEA) uses the QCEW data as a base for developing the wage and salary component of personal income. This measure and other applications of the QCEW data are widely used in determining federal allocation of program grants to state and local governments.

The QCEW data are used by businesses and by public and private research organizations as one of the best sources of detailed employment and wage statistics for economic forecasting, industry and regional analysis, and impact studies.

The program provides data necessary to both the U.S. Department of Labor’s Employment and Training Administration and California’s EDD to administer the Unemployment Insurance program. The information is used as an input for actuarial studies, determination of employer UI tax experience ratings, and UI benefit levels. Research using the QCEW data helps ensure the solvency of the Unemployment Insurance trust funds. The QCEW data also are used to compute state and national insured unemployment rates for workers covered by UI programs.

The QCEW data also are important for a variety of other BLS programs. The Unemployment Insurance Address File, created from the QCEW administrative records of UI-covered employers, serves as a sampling frame for BLS establishment-based surveys such as the National Compensation Survey, the Current Employment Statistics program, and the Occupational Employment Statistics Survey. The data also serve, for example, as the basic source of benchmark information for employment by industry and by size of establishment in the Current Employment Statistics program, the Occupational Safety and Health Statistics Survey, and the Occupational Employment Statistics Survey.

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Custom Tabulations and Confidential Data Requests
When the published Employment by Industry data does not provide the desired industry or geographic detail, customers can contact the EDD’s Labor Market Information Division to request a custom tabulation for detailed geographic areas for economic development and local labor market research. For more information, see Custom Tabulations and Confidential Data Requests.

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