Employee child care is something that many companies are still trying to figure out. It can be a difficult balance trying to keep your staff happy while not spending a fortune and not ostracizing those staff members that don’t have children.
Child care benefits are becoming a huge factor for many working parents when deciding on their next job. Jobs that offer child care benefits have a leg-up when competing against those companies that offer none. These benefits have shown to lower turnover rates, improve attendance, and raise morale.
Employee productivity also increases since parents are not worried about their children’s safety and their financial security. With child care benefits, they know that their children are being looked after and that there is no extra financial strain being placed on them.
Some of the biggest positives to come out of employee child care are:
- They feel more productive at work.
- They feel that the company is supportive of them and their work-life balance.
- They are less likely to leave their job to pursue other opportunities because they are happy with the benefits they are currently receiving.
- They are more likely to return to work after the birth of their child because of the benefits being offered.
- They actually consider these types of benefits when making the decision to work for the company.
- If the day care is on-site, they feel more involved in their child’s day because they are closer to them.
When it comes to benefits the employees are looking for in a new job, child care benefits are becoming increasingly popular. There are several different types of child care benefits that companies can offer to their employees. Even offering one of these can mean not only hiring happier staff, but also keeping them long-term.
According to a 2012 National Study of Employers, only 7 percent of companies in the United States offer on-site day care to employees, a percentage that has held since 2005.
There are many benefits to having on-site child care for both the company and employees. Parents feel that they don’t need to worry about their children because if anything does go wrong, they are only a few minutes away from them. It is much cheaper for parents to send their children to company-subsidized day care than to private day care centers, especially in major cities like San Francisco. There are also tax benefits that can be gained from building an on-site child care center for your employees. You can claim up to 20 percent of the center’s expenditures as well as 10 percent of any referral expenditures throughout the year. Together you can claim up to $150,000 a year. However, the center needs to run for at least 10 years, or you will have to pay back all of those tax breaks.
There are a few negatives to consider before building an on-site child care center for your employees. You will need to comply with local licensing laws, have increased liability for any potential child injuries, find child care providers, and make sure there is enough space for the children.
You will have to consider whether you offer full-day child care services or simply after-school services so that parents do not have to leave early or pay extra to have someone pick up their children from school. Insurance premiums will be much higher for a full-day rather than the half-day service.
2. Paid leave
Maternity and paternity leave are becoming increasingly important benefits that many employees look at before accepting a new job. The amount of time for paid leave that you offer your employees is entirely up to you.
Some companies have started offering a minimum of eight weeks paid maternity leave and up to four weeks paid paternity leave. You may want to offer a combination of paid leave with unpaid leave for new parents that allows them the flexibility to extend their time with a new baby without putting the company under further strain.
3. Flexible spending accounts
Flexible spending accounts, also known as FSAs, are accounts that allow parents to set aside pre-tax dollars in order to pay for work-related day care expenses. These expenses can include day care, before and after-school programs, preschool, and summer camps. An FSA helps a family save up to $2,000 per year on child care.
4. Child care subsidies
While many companies have begun to offer assistance with college tuition for the children of employees, it turns out, child care actually costs more over the same amount of time. Offering new parents help with child care is a huge benefit to employees.
This can be anything from a one-time payment to a regular bonus that is paid out monthly when the employees are paid their wages. Employers can give up to $5,000 to each employee’s child without the payment being added to the employee’s taxable income.
5. Flexible work schedules
Simply giving your employees the opportunity to work from home, to work flexible hours and to be able to pick up and drop off their children at school throughout the day without repercussion could help a company keep their employees for much longer.
If an employee can prove that they are responsible and hard working enough to complete work from home or during a shorter period of time during the day, it costs the company nothing to allow them a more flexible work schedule.
In addition to showing your employees that you value their work-life balance, you are also demonstrating to them that you trust them and believe in their work ethic even when they aren’t being watched.
6. Dependent care assistance programs
Dependent care assistance programs, or DCAPs, are programs that allow employees to deduct day care expenses from their paycheck on a pre-tax basis. It also provides them with reimbursements of up to $2,500 per year. A married couple can claim up to $5,000 a year. DCAPs are run through third parties, so companies often pay a small processing fee, but it is a small investment for companies to pass on huge benefits to their employees.
7. Backup child care
Finding last-minute backup child care for your children when they are sick, when school is closed due to weather or some other sudden reason, or when their regular child care situation is suddenly unavailable, can be incredibly difficult.
According to a national study by the Families and Work Institute in 2014, only about 8 percent of large companies and 4 percent of small companies were offering any type of backup child care.
Backup child care simply means that companies have a plan in place if an employee needs last-minute assistance. Companies can be creative with how they address these problems, but there are two main ways that businesses usually deal with backup child care.
- One of the most common forms of back child care being used by companies is reserving places in nearby child care centers that their employees don’t already use. This means that if, for some reason, the child care center that some of your employees usually use is closed at the last-minute, they can send their children to another place without much stress or extra cost.
- The other option that is frequently used is the in-home care option. This means that the company works with a third-party company that can send caregivers such as nannies or babysitters to an employees’ home if they need backup child care. There are a lot of different child care companies that offer these types of services. The carers have all been pre-screened and are able to supply someone on very short notice.
8. Child care center discounts
Many companies also look into building relationships with local child care centers. They can reserve a certain number of spots for the children of their employees. By bringing more business to these child care centers, companies are able to get their employees a discounted rate for their children.
The negative to this would be that since you are recommending these places to your staff, you hold a certain amount of liability if something goes wrong there. It is best to seek legal counsel on this if it is something you are considering for your company’s employee child care benefits.
If you’d like to add child care benefits for your employees, weigh the pros and cons of the options before making a decision. Remember, adding child care benefits could potentially make a huge difference in the satisfaction of your employees.