What to Consider When Offering Child Care Benefits to Employees
It’s no secret that employee benefits directly impact satisfaction and retention – and benefits packages are changing more than ever before. As competition for top talent heats up, employers are expanding their offerings to meet the wants and needs of today’s workforce.
Among these expanded benefits packages, support for working parents is a notable area of focus. Many of today’s parents want to work for companies that offer greater flexibility and family support. Yet, an overwhelming 81% of working parents say their employer doesn’t offer any kind of child care benefits, with 83% wishing they did.
At the same time, the lack of sufficient child care costs the nation a collective $57 billion annually in lost earnings, productivity and revenue – which breaks down to an annual loss of $37 billion for businesses, $13 billion for parents and $7 billion for taxpayers.
There are several benefits that can both support working parents and advance your company’s bottom line. Here’s what you should know about offering child care benefits to employees and how Primrose on Premise® can enhance your organization’s benefits package.
On-Site Child Care
● Benefits: By providing on-site early education and care, companies can give employees unmatched flexibility and peace of mind knowing their children are close by when they’re at work. Additionally, employer-sponsored child care can sometimes be more affordable and attainable for parents, especially in major cities where child care options are limited and expensive.
Businesses also benefit from tax breaks for building a child care center. In fact, there’s an opportunity to claim up to 20% of expenditures as well as 10% of any referral expenditures throughout the year, collectively up to $150,000 per year.
● Considerations: When building an on-site child care center, your company must comply with local licensing laws. It’s also important to work with a provider that offers flexible site requirements to make the most of the space you have. Ultimately, choosing the right early education company is key – check out this employer-sponsored child care checklist for several other factors to consider when conducting your search, like curriculum, flexibility and quality assurance.
● Primrose on Premise Advantage: As the leader in early education and care, Primrose Schools is committed to quality and has a premier brand reputation. Through Primrose on Premise, we can help create a customized approach for your company based on your specific needs related to enrollment, priority ages and available space.
Dependent Care Flexible Spending Accounts
● Benefits: A flexible spending account (FSA) through a Dependent Care Assistance Plan (DCAP) is a pre-tax option for paying for child care expenses incurred as a result of parents being at work. Funds from this account can be used to reimburse qualifying out-of-pocket child care expenses up to a maximum of $5,000 ($2,500 for married individuals filing separately). For example, since the money is set aside pre-tax, someone in the 28% tax bracket could save $280 in federal taxes for every $1,000 spent on dependent care with an FSA.
● Considerations: DCAPs are managed by third parties, so companies pay a processing fee. Unlike traditional health care FSAs, DCAP FSAs are used solely for reimbursements, not direct payments. Also, there are limitations on how the money may be used as parents must prove the child care was needed during working hours.
● Primrose on Premise Advantage: FSAs are a helpful, cost-effective offering to help your employees pay for on-site child care like Primrose on Premise and can help your employees feel supported and invested in your business.
Child Care Center Subsidies
● Benefits: To make child care more accessible, companies can consider subsidizing tuition for their employees’ children by either reserving a certain number of spots in nearby child care centers or investing in an employer-sponsored location.
● Considerations: Regardless of which child care solution is right for your company, there is a certain amount of liability involved when recommending or providing a service to employees. It’s essential to seek legal counsel before selecting or endorsing a provider.
● Primrose on Premise Advantage: Waitlists may still form for on-site child care or a nearby center but offering a more accessible option for high-quality early education and care can help your employees with children feel more supported. Through Primrose on Premise, we provide working parents with peace of mind by bringing more than 35 years of expertise in high-quality early education and care directly to their workplace.
To learn more about bringing premier early education and care to your workplace, contact the Primrose on Premise team.
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