Employment Cost Index

What Does Employment Cost Index Mean?

The Employment Cost Index (ECI) is an index that tracks inflation related to employment costs and is calculated and maintained by the U.S. Department of Labor. It is common for employers to provide insurance coverage as a benefit, and the Department of Labor monitors the cost of these benefits on a quarterly basis.

Insuranceopedia Explains Employment Cost Index

The Employment Cost Index (ECI) accounts for various components of employee compensation, including wages, benefits, and bonuses. Employers commonly provide options for benefits like health and life insurance plans, so the ECI monitors a range of insurance costs, not just one type. A sharp increase in the cost of these insurance policies may signal rising inflation, prompting the government to consider countermeasures to manage inflation rates.