The Benefits of Offering Child Care Benefits to Employees and How to Do it
When deciding to recruit and attract the right workers for your business in today’s tough job market, offering childcare coverage to employees is one aspect that can help.
Big businesses, such as Starbucks and Best Buy, are incorporating childcare into their list of employee perks. But, it’s not only the big wigs that can benefit from supporting their employed parents. Small businesses can have a major positive impact on the constant financial and emotional burden of working parents. Doing so will make it easier to recruit and retain quality talent.
It makes for happy employees, but, as an employer, several perks also come your way. The Internal Revenue Service allows you to claim 10 to 25 percent of the cost— or up to $150,000—each year when you directly pay for employee’s childcare expenses.
Even beyond the financial benefits, helping working parents can mitigate the gender pay gap. Which, according to the New York Times, significantly widens as men and women advance in career. Lack of childcare is one of the primary factors that prevent us from creating an equitable workforce and eliminating the wage gap.
Now, let’s look at how small businesses can offer working parents childcare to build a more robust and effective workforce.
Adopt Flexible Work Options
In this ever-changing working environment, more and more jobs can be worked remotely. This is especially crucial for working parents. If remote work or flexible working hours are offered, parents might be able to work around the dare-care conundrum. Either reducing the need or eliminating it completely.
Flexibility, along with other parent-friendly policies, is benefits that more experienced and loyal employees have come to expect.
Offer Childcare Subsidies
According to the Center for American Progress, “In no state does the cost of center-based infant or toddler child care meet the federal definition of affordable.” So, you’re asking yourself, what’s the point of working if all the money goes toward childcare. The price tag is just too expensive to make it a viable option.
A possible way to help this financial burden, some businesses bear some of the responsibility by subsiding childcare costs for their workers. Either by paying outright to the employee or negotiating discounts with local childcare providers.
For instance, WeeCare, a uber-esque platform for home childcare owners, makes it easy for businesses to connect with local providers. As in-home daycares are typically 30 to 40 percent cheaper than traditional larger daycare centers, it makes it even easier to bear the brunt of the out-of-pocket cost for childcare.
Remember the Tax Break
If you’re helping to subsidize your employee’s childcare costs, chances are you’re likely earning a substantial tax break! You can deduct the subsidized amount of childcare for your employees, up to $150,000 a year.
Offering a flexible spending account is another way you can help cut employee costs. When parents use pre-tax accounts for daycare, summer camps, pre-school, and other qualifying expenses for children under 13 years old, they keep 30 percent more of their own money.
Be There for Your Employees
Sick kids are the worst, both for the parents and the business. They can upend all kinds of work plans and cost essential working time and finances. Working families in the U.S. miss out on $8.3 billion because of a lack of affordable childcare, one CDN (Center for American Progress) study found.
This is when it’s proactive to form relationships with local child care or babysitting companies that can fill in at the last minute. More businesses are offering backup childcare to cover, or subsidize, the costs of emergency care when a child becomes sick or daycare arrangements fall through.
Companies like The Babysitting Company have thousands of vetted sitters across the country that will either babysit in homes or onsite at businesses.
Other companies that provide backup care for employees:
Offer Daycare at Work
Crazy concept, but hear it out. As with most areas of cost reduction in business, you want things done “in house.” Why should childcare be any different?
If you have enough employed parents who require some form of daycare, it might be beneficial to look into setting a part of the office up as a daycare.
It’s an unusual situation, but one that should be considered. First, check with local and state regulations to determine what requirements are needed to operate an on-site daycare. It might get a bit costly, but the payback of not having employees concerned about drop-offs and pickups may be worth the financial burden alone.
And remember, an employer can deduct every cost involved with setting up and running the program, up to $150,000.
Create a Caring Work Culture
Even if subsidizing childcare isn’t a viable financial option for your company, small gestures to support working parents can go a long way. Websites like Mindful Return offer insights and courses into how parents can better cope with becoming a working parent. Things like a workplace support group for parents, discounted breastmilk shipping companies and establishing new policies that allow for more flexibility.
The most important thing to keep in mind is that, as an employer, you want to create a working environment where parents feel supported and encouraged to advance in their careers. Working parents should not feel torn between being a good employee and a good parent. Having both is not only an option but a necessity for an outstanding workforce and culture.