The COVID-19 pandemic and subsequent shift to remote work highlighted the challenges working parents often face in finding adequate and affordable childcare. Employers have an important role to play in supporting parents in their workforce through solutions like childcare benefits and a flexible work schedule.
Cheryl Oldham, Vice President of Education Policy for the U.S. Chamber of Commerce, recently offered insights about how small businesses can support working parents on their staff by offering more robust childcare options.
[Read the U.S. Chamber’s Employer Roadmap: Childcare Solutions for Working Parents for more on how to support working parents.]
Survey your employees’ needs
The first thing employers should do when establishing new childcare solutions is survey their employees to better understand what benefits to provide, said Oldham. Think about who your employees are and what their challenges are in terms of childcare. Ask them about what services and options would be best for them and their lifestyle. Having a universal policy or program may not be applicable as not every worker has the same childcare needs.
“Think about the potential to provide flexible hours or more strict shift scheduling,” Oldham said. “A working parent may not need access to childcare. They may already have it, but understanding their schedule and having some predictability around it is really critical.”
Partner with childcare service providers
Both flexible and predictive scheduling are important for parents, so they can arrange their childcare needs based on their work responsibilities. But some employees may need their children to be supervised by a third party while they’re working. If so, businesses can arrange service providers for their employees at a discounted rate.
“There are third-party intermediaries that could really help your employees, but [they] also can support you as an employer in helping you to develop the kind of a benefit structure you might want to provide,” Oldham said.
[Read more: 5 Ways Small Businesses Can Support Employees With Kids]
Understanding what the community has available in terms of childcare resources — whether that's for-profit, nonprofit, income, home care, faith-based care, [or] government-provided care — can be a really important resource to provide to your employees.
Cheryl Oldham, vice president of education policy, U.S. Chamber of Commerce
Be a resource to your employees
In addition to partnering with service providers and providing company benefits, your business can also serve as a resource to your employees.
“Understanding what the community has available in terms of childcare resources — whether that's for-profit, nonprofit, income, home care, faith-based care, [or] government-provided care — can be a really important resource to provide to your employees,” Oldham said.
Oldham advised gathering information about local childcare options and community services that could be beneficial to your employees. You can then share this information with your staff directly and regularly update them about any changes.
Educate employees about government programs and tax credits
While employers can support working parents through their benefits offering, there are also government programs and tax credits that businesses should educate their employees about. One of these is the Child and Dependent Care Tax Credit, which is a tax break for individuals or working parents to help them offset the cost of childcare.
“There are three things that are required in order to meet [the Child and Dependent Care Tax Credit],” Oldham explained. “You have to have spent earned income on care, your child has to be 12 years old or younger, and you must claim that child as a dependent. And then the maximum amount is $3,000 for one child, $6,000 for two or more.”
[Read the U.S. Chamber's Employer Guide to Childcare Assistance and Tax Credits]
Another program that small businesses can look into is the Dependent Care Flexible Spending Account (DC FSA).
“[The DC FSA] is a pre-tax benefit account that's used to pay for eligible dependent care services,” Oldham said “The DC FSA funds are withdrawn from an employee's paycheck, and it's pre-tax, which reduces the employee's overall tax burden.”
Businesses that have many employees can consider operating an in-house childcare center or outsourcing one to a third party. For those that do offer this as an option, some of their expenses can be tax-deductible.
“This allows employers to claim 25% of expenses incurred when they operate an in-house childcare center, or they contract out with an existing provider to provide some slots for their employees,” Oldham said.
To learn more about available child and dependent care tax credits, visit our guide.
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