Four Things Employers Can Do to Help Employees with Childcare

Childcare is a critical component of alleviating the worker shortage crisis. Try theses four things that employers can do right now to help their employees access childcare.

1. Research existing childcare options in the community and provide a childcare directory for employees.

Many states have existing childcare networks or associations for the education of young children. Contact the organizations who specialize in childcare in your state to help identify different types of quality care in your community. Be sure to include traditional childcare centers and childcare homes, non-profit and faith-based providers, and Head Start and Early Head Start programs for eligible families.

2. Contract with a third party company to assist employees in connecting with childcare providers.

A third party company can facilitate an array of services that will bolster benefits packages and provide substantive assistance to employees in addressing dependent care needs.

A third party company can:

• Provide direct guidance and service to employees to help them find the type of childcare that meets their needs.
• Facilitate a “back-up care” program where a business establishes a relationship with a specific provider that will be able to provide care should a working parent’s usual childcare arrangement be disrupted.
• Set up and manage an employer subsidy program where employers help defray the cost of care for employees by providing vouchers.
• Manage partnerships with childcare providers. For example, arranging access to a certain number of spots reserved at a childcare provider specifically for that employer, oftentimes at negotiated special rates.

Examples of third party intermediaries include KinderCare, Care.com and TOOTRiS.

Did you know? Employers can recoup some of the costs of third party intermediaries through a tax credit. Learn more about the Employee-Provided Child Care Tax Credit on below.

3. Offer a Dependent Care Flexible Spending Account (DCFSA).

Employers can offer a Dependent Care Flexible Spending Account (DCFSA)—a pre-tax benefit account used to pay for eligible dependent care services. More on this in the section below.

4. Educate employees about their tax options.

Do your employees know that parents can reduce their tax burden by claiming childcare expenses? One example—the Child & Dependent Care Tax Credit (CDCTC)—is highlighted in a section below.