The pandemic forced employers of all sizes to reconsider the importance of employees having childcare support. The double whammy of working parents and kids stuck at home decimated presumptions about manageable accommodations. Burnout is still taking its toll as we emerge from the crisis.
The good news is, even small businesses can support their caregiving employees with helpful benefits. The key is to offer truly effective ones.
WHY IT MATTERS
Consider the impact the pandemic had on families at home with parents who had to be employees, teachers, and caregivers simultaneously. The pandemic proved that a lack of childcare can derail a good employee’s career. An August 2020 survey by Care@Work of parents with children under the age of 15 revealed 73% were considering making major changes at work including:
- Revise their schedules: 44%
- Look for a different job: 21%
- Leave the workforce entirely 15%
TAX CREDIT INCENTIVES
One benefit to consider is to provide childcare subsidies designed to help cover the costs of care by:
- Making direct payments to employees for caregiving
- Partially subsidizing childcare with select care centers or certain childcare workers.
Employers that provide childcare subsidies can take advantage of an annual tax credit of up to $150,000 if they use it for qualified childcare facilities and services. According to the IRS, “the credit is 25% of the qualified child-care facility expenditures, plus 10% of the qualified child-care resource and referral expenditures paid or incurred during the tax year.”
Additionally, businesses can offer employees a dependent care flexible savings account (DCFSAs) Both employees and employers can contribute up to $2,700 total to a worker’s DCFSA. Businesses can partially or fully subsidize these tax-free contributions that can then be used to pay for childcare-related expenses.
PRIORITIZING PROVIDER HELP
There are numerous other ways to support caregivers besides helping pay for childcare. But if it isn’t provider help, is it effective?
A May 2020 survey of HR professionals by the Society for Human Resource Management (SHRM) found that in response to pandemic-related childcare dilemmas, most offered flexible work hours (86%) and reduced work hours (63%). Provider help was less common, with 9 percent of employers providing or considering child care subsidies.
However, employees still had to balance two full-time jobs: Their company jobs and the virtual learning/caregiving of their children. When employees were surveyed about the effectiveness of flexibility, about half still thought their employer had unrealistic expectations about what they could accomplish while caring for others.
Conduct a staff check
The bottom line: Every company is different. Are flexible work hours actually causing burnout? Do employees feel comfortable taking additional PTO offered? Has their childcare support changed? Surveying to tailor your offerings is a great way for good intentions to produce meaningful help.
Additionally, if you are considering subsidies, and have more questions about the tax implications, do not hesitate to reach out to your tax professional for guidance.