First Day of Kindergarten

Child Care

From resource-intensive strategies such as on-site child care to less resource-intensive ones such as information and referral services, there are many ways employers can support their employees in finding high quality, affordable child care. 

Why

  • Access to quality child care increases a parent or caregiver’s likelihood of completing postsecondary education, raises labor force participation rates, increases productivity, and helps businesses attract and retain talent (1)

  • The Federal Reserve reports that nationally, child care and other family obligations are the dominant reasons why people are not working, other than retirement. One-eighth of those not working and one-fourth of those working part-time cite these reasons (2).

  • Child care is a significant expense for SLO County families. The costs of trained personnel, safe facilities, and well-balanced meals account for the high cost of providing care. Unlike the K-12 system, in which the costs of a child’s education are covered by public funding, working parents assume the cost of early child care. Thus, a significant portion of a family’s income can be spent on child care. The average yearly tuition for infant care in SLO county is $14,977 which equals 24% of the median income of a family of four (3). This share climbs to 31% in single-parent households, and to 63% for a single parent making minimum wage (3). This means that quality child care is well out of reach for many Central Coast families.

  • SLO County has seen a 17.7% decrease in family child care homes (FCC) since 2018 (4). This is significant because unlike traditional child care centers, FCC programs often provide full-time care and are the only licensed programs that provide care during non-traditional hours, such as evenings and weekends. FCC caregivers also provide a substantial portion of the infant/toddler care in the county.

  • Among children ages 0-12 with parents in the labor force in SLO County, a licensed child care slot was available for only 30% (7,492) of families in 2016 (5)

  • According to the 2018 SLO County Child Care survey, it took 24% of respondents more than a year to find child care, 19% spent 1-3 months seeking care, and it took 4 to 6 months for 15% of respondents to find care (4)

 
 
 
 

On-Site Child Care

 

What 

 

Child care provided at the place of work for parents through a corporate partnership or privately run. Examples of companies that offer privately or company run onsite child care programs include Google, Patagonia, Trust Automation, Mindbody, Promega, Dartmouth Hospital, and Lakeshore.

Benefits

 

Consistent child care saves employers money. On average, parents will miss 4.3 days over a six-month period due to child care needs. (6)  It is estimated that breakdowns in child care, which lead to employee absences, cost U.S. businesses $3 billion annually. (6) A survey by the Early Care & Learning Council reports that when companies provide on-site child care, employee absences decrease by up to 30%, and job turnover can decline by as much as 60%(7) Though it can be a costly benefit, the cost can be recouped every year through retention.

 

  • San Luis Obispo Child Care Planning Council serves as a forum to address child care planning and the needs of families in the community for all types of child care, both subsidized and unsubsidized. The Council welcomes conversations from businesses looking to partner with local established child care providers for on-site child care or other alternative child care options.

  • The Child Care Resource Connection with the Community Action Partnership of San Luis Obispo County, Inc. (CAPSLO) is a local resource that assists in coordinating and helping generate accessible quality, affordable child care in SLO County.  CAPSLO Child Care Resource Connection also provides referrals for families seeking child care options.

Vouchers, Discounts, Sponsored Slots, or Referrals

What

 

Partnering with a high-quality child care provider to provide a tuition discount and/or priority enrollment for their staff. Whether it is paying a yearly 'membership' to reserve a number of spots for your employees or becoming a 'preferred partner' by committing to send employees to specific programs in trade for a discounted tuition.

 

  • The Child Care Resource Connection (CCRC) can help connect businesses with SLO County child care programs that would be interested in partnerships. CCRC can also connect employees with a list of child care programs that may be able to meet their needs. CCRC provides child care subsidies for enrolled, income eligible families.

  • Companies may offer child care vouchers or subsidies for parents, or companies may invest in a child care assistance fund for employees.

  • Providing human resources or other administrative staff with information necessary to assist parents with referrals to reliable resources may help reduce stress and time away from work. See the Resource Guide.

  • Services can be provided through a corporate benefits partnership with high-quality child care centers. KinderCare and Bright Horizons are two providers that have established corporate models.

Benefits

This may be the most cost-effective solution for businesses wanting to support parents. 

Subsidizes, Stipends, and/or Reimbursements 

 

What

 

Employers can contribute a certain percentage to the cost of each employee's child care without the subsidy being added to the employee’s taxable income. Child care can be subsidized in a number of ways, examples include:

  • Subsidize the cost of care at an on-site center.

  • Pay membership fees for an online emergency or back-up care service.

  • Contribute to employees’ dependent care reimbursement accounts. 

  • Establish relationships with child care providers and offer a discount to employees who use providers from the network.

Benefits

Employers considering this approach should explore potential tax benefits, with their tax advisor, as the amount of subsidy provided to employees may be deductible.

 

Child Care Benefit Plans and Tax Strategies

 

What

 

Utilizing potentially tax-saving strategies to help employers support working parents and affordable child care. Subject to CPA/benefits provider confirmation, examples may include: 

  • “Cafeteria Plans,” which offer a menu of benefits tailored to meet the needs of employees, and which can reduce income tax withholding, FICA, and unemployment taxes;

  • Allowing employees to set aside up to $5,000 in pre-tax income for child care expenses;

  • The use of Dependent Care Assistance Programs to allow employers to fund a portion of an employee’s child care expenses; and

  • Employer contributes to an employee’s child care expenses.

Benefits

 

Wisely investing in employee support programs early on can reduce the costs of catching up with your competitor's child care programs and benefits down-the-road.

 

Backup or Emergency Care

What 

Backup or emergency care programs supplement a regular child care program and can be implemented during times when regular providers are sick, unavailable, or during unexpected school closings. Arranging these programs in advance, or having options available for employees during these non-standard circumstances can reduce stress and anxiety for all involved. 

Third-party providers such as Bright Horizons and Care@Work, among others, sometimes offer these add-on or a-la-cart services. In some cases, these third-party providers offer 24/7 online, mobile app, and staffed call center access. In the event backup or emergency care is needed, they work to provide employers with a national network of vetted child care center options and in-home caregivers. It is important to understand the volume of backup and emergency options in your specific geographic region, as providers sometimes have different levels of support in different cities and regions. 

Benefits

 

Allows employees to continue their regularly scheduled work when something unexpected comes up. Providing backup or emergency care can help ensure that unexpected disruptions don’t negatively impact the workplace. Backup or emergency care can also benefit business continuity, employee recruitment, and retention, as well as demonstrate high family value.

 

References

  1. Stevens, K. B. (2017). Workforce of today, workforce of tomorrow: The business case for high-quality childcare. https://www.uschamberfoundation.org/sites/default/files/Workforce%20of%20Today%20Workforce%20of%20Tomorrow%20Report.pdf

  2. Board of Governors of the Federal Reserve System. (2017). Report on the economic well-being of U.S. households in 2017, May 2018 (p. 66). https://www.federalreserve.gov/publications/files/2017-report-economic-well-being-us-households-201805.pdf

  3. California Child Care Resource & Referral Network. (2018). 2017 Child care portfolio.

  4. San Luis Obispo County Child Care Planning Council. (2018). San Luis Obispo County Child Care Planning Council needs assessment 2018-2022. http://www.sanluischildcare.org/uploads/2/2/1/3/22138440/slo_county_ccpc_needs_assessment_2018_with_appendices_final.pdf

  5. American Institutes for Research. (2016). Early learning needs assessment tool. https://www.air.org/resource/early-learning-needs-assessment-tool

  6. Shellenback, K. (2004). Child care & parent productivity: Making the business case. Cornell University. http://s3.amazonaws.com/mildredwarner.org/attachments/000/000/074/original/154-21008542.pdf

  7. The U.S. Chamber of Commerce Foundation. (2017). Leading the way toolkit: A guide for business engagement in early education. U.S. Chamber of Commerce Foundation. https://www.uschamberfoundation.org/reports/leading-way-guide-business-engagement-early-education

 

Disclaimer: This document is being provided as a general guide to employers to consider implementing certain family-friendly policies and procedures within their respective organizations. This document is not an exhaustive list of programs, nor does it set out all of the legal or tax requirements with respect to certain programs. Before implementing any of the programs in this guide, employers should carefully consider the impact on the organization and should consult legal and/or tax counsel and their human resources professional. First 5 San Luis Obispo County does not provide legal advice or human resources consultation, and this document is not intended to, and should not be relied on to, provide legal or human resources advice.

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