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Child Care

October 30, 2023

Top Child Care Benefits Companies Should Offer Their Employees

By Joan Nguyen

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Employers are increasingly prioritizing child care benefits to win over employees and retain them. See examples like the following:

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What child care benefits are available?

The following are the best known child care benefits but the landscape continues to evolve. We will expand on each a bit further below. 

  • Family and Medical Leave Act (FMLA)
  • Paid Parental Leave
  • Backup Child Care Services 
  • Onsite Daycare
  • Childcare Subsidies
  • Flexible benefits plan
  • Dependent Care Flexible Spending Account (DC FSA)

While not a direct child care benefit, allowing for flexible working conditions have proven to be helpful to families with children so we are including this on the list. 

Family and Medical Leave Act (FMLA) and Paid Parental Leave

FMLA is a United States Labor Law that requires covered employers to provide employees with job-protected, unpaid leave for qualified medical and family reasons. Eligible employees are entitled to 12 work weeks of leave in a 12-month period to care for a new child (newborn, adoption, foster), or a seriously ill family member including military service member, or recover from a serious illness.

FMLA has its limitations and should be seen as the floor rather than a ceiling. Parental leave is a benefit available in most countries and is used to describe either parent taking a leave to care for small children. However, when it comes to paid parental leave, the United States is one of just a handful of countries that does not have this as law. This is where employers often step in to provide the benefit of paid leave while parents are caring for young children or families in need. National polling suggests there is broad support for paid family leave and employers have the opportunity to be at the forefront of providing this benefit for their employees. There does continue to be a leave bias in place in which maternity leave is provided while paternity leave is minimal to none.

Backup Childcare Services 

Backup child care is necessary when one’s primary childcare is unavailable or falls through such as daycare closures, nanny calling out sick etc. Backup care is often under-appreciated when in reality, it is crucial in supporting working parents. Every working parent has experienced the pain and stress that came with regular COVID-related school closures and reduced primary care options. Backup care helps to compliment and round out child care coverage for working parents.

Onsite Child Care

Onsite child care greatly reduces the additional commute time required of working parents to drop off and pick up young children from child care facilities on the way to and back from work. The proximity to one’s children while at work and being able to commute to the same location has many benefits to the parties involved; working parents, employers and even child care providers. However, there are drawbacks as well; from an employer standpoint, it is an investment in space and the service is usually outsourced to larger child care companies at great cost. Additionally, a work-from-office culture is the underpinning of this benefit when working parents are increasingly trending towards wanting hybrid or flexible working conditions.

Child Care Subsidies

Child Care subsidies are payments made by employers towards employee child care related expenses. They come in the form of employer-provided spending accounts or bonuses designed to help cover the costs, in full or partially, of child care related expenses. Rising child care costs have been the subject of many conversations across America and simple, employer-provided subsidies can provide employees with the choice of child care and the benefits of a discount provided by their employer.

Flexible Benefits Plan

This is a benefit program that offers choice to employees depending on where they are in life; it allows the employee to choose between various benefits including cash, life insurance, health insurance, vacations, retirement plans, child care and others so that employees could tailor their benefits according to their life needs at the moment. Employers generally make contributions for all plan-eligible employees and employees use those contributions to buy various benefits that best suit their needs. Programs like this allow employees flexibility and choice depending on their life circumstances. 

Flexible Working Conditions

Employers could additionally offer employees flexible working conditions in which employees could take time out of the day to tend to their children and then return to work if they need to finish up. Allowing employees to set their own working hours while setting clear boundaries and expectations can reap benefits for working parents as well as employers. There are ways to do this in a way that feels fair to all employees alike by putting the right culture and processes in place.

Why offer child care benefits for your employees?

There are many reasons and benefits to provide child care benefits for your employees and these are just a few of them. 

  • Through the Employer-Provided Child Care Credit, employers can recoup some of the costs associated with providing child care benefits through a tax credit. Employers give and get back as a result. The list of state tax credits can be found here.
  • Employers can boost productivity. ChildCare Aware estimates that U.S. Businesses lose $4.4billion annually due to childcare related absenteeism. Providing child care benefits will increase engagement among working parents and naturally boost their participation and productivity at work. This is simply good for business. 
  • Attract and retain top talent. Companies like Marriott are citing their child care benefits as “one of our top attraction and retention tools”. It is also an important way to attract women in the workforce, many of whom dropped out due to lack of child care options during the COVID pandemic.

Child care benefits are increasingly a non-negotiable when parents are the dominant driver of the workforce today (71% working mothers with children, 92% working fathers with children). Employers have an opportunity to step up and fill the gap left by lack of federal or state sponsored child care programs and alleviate the stress that child care often entails. Through benefits programs like the ones mentioned above, employers can provide a robust support structure for our working parents in the workforce, leading to massive and lasting societal and economic impact.

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