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Mini Dragon Group (ages 6-7)


Business Establishment

Statistics of U.S. Businesses (SUSB) covers more than 6 million single-unit establishments and 1.8 million multi-unit establishments. The Business Register is the Census Bureau's source of information on employer establishments included in the SUSB program. The Business Register is a multi-relational database that contains a record for each known establishment that is located in the United States with paid employees. An establishment is a single physical location at which business is conducted or services or industrial operations are performed. An establishment is not necessarily equivalent to a company or enterprise, which may consist of one or more establishments. A single-unit enterprise owns or operates only one establishment. A multi-unit enterprise owns or operates two or more establishments. The treatment of establishments on the Business Register differs according to whether the establishment is part of a single-unit or multi-unit enterprise.

business establishment

A single-unit enterprise's unique identifier is its Employer Identification Number (EIN). The Internal Revenue Service (IRS) issues an EIN and the enterprise uses it as an identifier to report payroll taxes. All employers are required to have at least one EIN. Because a single-unit enterprise has only one establishment, there is a one-to-one relationship between the enterprise and the EIN. Thus the enterprise, the EIN, and the establishment all reference the same physical location and all three terms can be used interchangeably and unambiguously when referring to a single-unit enterprise.

Descriptive information for a single-unit establishment in the SUSB universe, including geographic location, industry classification, legal form of organization classification, payroll, and employment, come from a variety of administrative record and survey sources. Administrative records filed by EIN are the most common source of information for single-unit establishments, with updates on geographic location and industry classification from Census Bureau conducted surveys.

For multi-unit enterprises a different structure connects the enterprise with its establishments via the EIN. Essentially a multi-unit enterprise is associated with a cluster of one or more EINs and EINs are associated with one or more establishments. A multi-unit enterprise consists of at least two establishments. Each enterprise is associated with at least one EIN and only one enterprise can use a given EIN. One multi-unit enterprise may have several EINs. Similarly, there is a one-to-many relationship between EINs and establishments. Each EIN can be associated with many establishments, but each establishment is associated with only one EIN. With the possibility of one-to-many relationships, there must be distinction between the enterprise, its EINs, and its establishments. A unique employer unit identification number identifies each establishment owned by a multi-unit enterprise on the Business Register.

The Legal Form of Organization (LFO) for SUSB establishments is derived from administrative record sources. SUSB publishes U.S.-level data (starting with 2007) and state-level data (starting with 2018) by the following legal forms of organization:

Historically, the permanent on-site workforce at a business location were paid employees of that establishment. This traditional practice of enterprises directly hiring employees is still the dominant employer/employee relationship in the United States. However, in recent years a new workforce arrangement has emerged. Under this new arrangement, a professional employer organization (PEO) or employee-leasing enterprise operates in a co-employment relationship with client businesses to provide leased workers and specialized management services. Employee leasing enterprises are responsible for payroll, including withholding and remitting employment-related taxes, for some or all of the employees of their clients, and also serve as the employer of those employees for benefits and related purposes.

SUSB covers most of the country's economic activity. The series excludes data on self-employed individuals, employees of private households, railroad employees, agricultural production employees, and most government employees. Businesses operating without an EIN, and businesses with an EIN but without employees, are excluded from the SUSB universe.

A certain amount of undercoverage occurs in the universe, primarily with establishments for multi-unit companies. Usually, the Census Bureau does not create a multi-unit company structure in the Business Register for very small employers (less than 10 employees) identified in the Economic Census. In addition, the Report of Organization is an annual mail survey that includes all multi-unit companies with 500 or more employees. Companies with less than 500 employees are only selected for the Report of Organization when administrative record sources indicate the company may be undergoing organizational change and are adding or dropping establishments. Establishments for smaller companies may be missed, as well as establishments for companies not responding to the Economic Census or the Report of Organization. The Census Bureau takes much effort to get establishment information for large companies because of their importance to the economy. The Census Bureau does not have any estimates of establishment undercoverage. Coverage of payroll and employment is very good because of the usage of administrative record data.

Industry classification of business establishments in SUSB is according to the North American Industry Classification System (NAICS), which includes nearly 1,000 industries. For more information on the NAICS codes, as well as changes over the years, visit the NAICS website. NAICS codes are updated every five years.

The primary source of industry classification is derived from data collected through the Economic Census or through other Census surveys. When this is not available, the Census Bureau uses a hierarchy of administrative record sources to assign a NAICS code, including classifications from the Bureau of Labor Statistics, business birth information, and self-assigned codes from income tax records.

For a small percentage of records, only a partial classification is possible from all sources. For these cases, a complete industry classification is assigned, or imputed, by using a "nearest neighbor" assignment process that assigns the NAICS from an establishment with similar payroll, employment and organizational type with possible constraints. Analysts review the assignments to ensure that anomalies do not occur at the county level. For some multi-unit establishments with a partial classification, a complete code is imputed from another establishment within the same enterprise. The imputation rate for complete codes varies widely during the five-year Economic Census processing cycle, but generally affects small businesses. Completely unclassified records are an even smaller percentage and are tabulated and published separately.

An enterprise may have establishments in many different industries. For the purpose of classifying an entire enterprise into a single industry, the classification methodology starts by excluding nonoperating establishments - establishments classified as manufacturers' sales branches and offices, establishments engaged in management of enterprises and enterprises (NAICS 55), and auxiliary establishments. The enterprise is then classified into the 2-digit NAICS sector in which it paid the largest share of its payroll. Then, within this 2-digit NAICS sector, the enterprise is classified into the 3-digit NAICS sub-sector in which the enterprise paid the largest share of payroll. Finally, within the assigned 3-digit NAICS sub-sector, the enterprise is classified into the 4-digit NAICS industry group with the largest share of payroll.

SUSB classifies an establishment by its physical location. Under the usual definition, an establishment or business is a fixed physical location or permanent structure where some form of business activity is conducted. The Economic Census and the COS requests the physical location of each establishment in a company. In addition, administrative record sources provide physical location addresses. In some cases when the physical location is not available geographic assignment is based on the mailing address. When a business relocates, there may be a significant delay until the Census Bureau receives the updated physical location address, particularly for small businesses. This may have an impact on establishment counts at the county level, but this level is not measured.

Prior to reference year 2017, the number of establishments in a particular tabulation cell was not considered sensitive; therefore, counts of establishments were released without any disclosure avoidance methods applied. Beginning with reference year 2017, cells with fewer than 3 establishments have been omitted from the release. The use of an employment range flag (EMPLFL_R) was discontinued beginning in reference year 2018 and a noisy employment cell value is provided.

Also starting with 2017 SUSB, the publication flag 'D' (withheld to avoid disclosing data for individual businesses; data are included in broader industry totals) has been replaced with publication flag 'S' (withheld to avoid releasing data that do not meet publication standards; data are included in broader industry totals).

Establishment payroll and employment data for multi-unit enterprises are collected through the Economic Census and the Report of Organization. Data for companies not included in the Report of Organization or not responding to the survey are imputed from administrative record data by taking company level administrative payroll and employment data and distributing it down to the establishment level by best estimates of the size of each establishment in the company. If some establishments have reported payroll and some do not, the breakdown is performed with the difference between the administrative data at the company level and the total reported amounts. 041b061a72


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