If you’re an employee, you can save on out-of-pocket childcare expenses by utilizing an employer-sponsored Dependent Care Flexible Spending Account (FSA). This allows you to withhold pre-tax dollars for qualifying dependent care costs from your paychecks.

Eligible expenses include children under 13 or adult family members who cannot care for themselves and reside in the household for at least eight hours daily.

Relieves Stress

Working parents often feel overwhelmed by a laundry list of ” hate-to-dos.” Employers can provide helpful perks such as grocery delivery and convenient errand-running services to help employees tackle their daily chores and reduce stress.

For example, employers can offer a dependent care assistance program (DCAP) or a Dependent Care Flexible Spending Account (FSA). Workers put aside pre-tax dollars for their qualifying dependent care expenses, such as daycare or elder care, with this benefit. The amount they take out of their paycheck is exempt from federal and many state payroll taxes, making this a great benefit for employees and employers.

But remote and hybrid work is only some rainbows and butterflies, according to a recent study by Bright Horizons. The study found that many working parents in these arrangements struggle with feelings of isolation as they try to maintain productivity in their home offices while employers ramp up return-to-office expectations.

Boosts Productivity

Employees with a solid backup childcare solution can focus on their job. They don’tdon’t have to worry about finding a last-minute babysitter or rescheduling work meetings when their child is sick, or the daycare closes due to quarantine. Instead, they can be more productive and focused at work, which benefits the company.

As an added benefit, dependent care assistance programs allow employees to set aside pre-tax dollars to cover the cost of eligible expenses. These can include fees for licensed daycare or adult care facilities, before and after school programs, nannies, preschool expenses and summer camp.

Working parents who struggle to balance family and professional responsibilities often experience burnout and mental health struggles, which is why it’s so important that employers provide best-in-class support for them. Offering flexible benefits like childcare subsidies can lower absenteeism, reduce turnover, and boost employee morale – proving that being family-friendly is good business.

Increases Retention

Employees that can juggle work and home life are happier, less stressed, more engaged and more productive at their jobs. Employers that offer family-friendly benefits like dependent care assistance are more likely to retain employees who may otherwise leave to find more flexible work elsewhere.

A Dependent Care FSA allows eligible employees to set aside pre-tax dollars to help pay for qualified child or elder care expenses not covered by other sources of income. The funds are tax-free when spent on approved costs and can be carried over from year to year.

During the COVID-19 pandemic, many employees struggled to balance work and caring for children or elderly parents. As a result, some employees reduced their hours or left the workforce altogether, disproportionately affecting women. A 2021 study from McKinsey and Company found that 70 percent of women who left their jobs did so to care for a family member. In addition to offering family-friendly benefits, employers can provide resources for working parents that address the complexities of their job and personal lives. For example, some companies offer onsite childcare and backup childcare policies. In contrast, others host webinars and lunches and learn about finding quality child care and elder care options.

Boosts Morale

Access to child care and elder care benefits can help working families manage their lives. This can reduce absenteeism, improve productivity, and enhance morale. This is good for the company and the economy.

However, these benefits are often a luxury for many American families. The lack of affordable, high-quality care leads to family disruptions that can cause employees to call out or leave their job. In the COVID-19 pandemic, one in four mothers considered slowing down their career, taking a less demanding role or leaving the workforce altogether because they couldn’t find or afford suitable child care.

The President’sPresident’s Build Back Better agenda includes a plan to invest in family-friendly policies, including making child care and elder care more accessible and affordable. These policies help ensure that all parents can stay in the workforce while still having time to meet their family’s needs. Flexible work schedules, backup in-home caregivers, and remote work arrangements can all be a big boost to morale and help working parents feel more confident that their careers are sustainable for the long term.

Boosts Employee Engagement

Employees worried about their family’sfamily’s care needs need help to focus on their work fully. As a result, they may miss deadlines and produce lower-quality work. Fortunately, dependent care assistance helps working parents manage their professional and personal responsibilities.

According to one study, working parents needing help finding quality care costs the economy $4.4 billion in lost productivity and absenteeism yearly. This includes costs related to child care and elder or disabled care.

To help employees with their family’sfamily’s care, agencies can offer various dependent care benefits, including telework, dependent care FSAs, childcare subsidies and backup care. In addition, agencies can provide employee resource guides and webinars that help employees navigate their caregiving responsibilities.

Offering a dependent care benefit can help employers attract and retain employees. It can also help businesses compete more effectively, improve morale and brand image, and move companies closer to global sustainability standards. As a result, these policies can help enterprises to boost productivity, reduce recruitment costs and employee turnover. Moreover, they can help ensure the stability of employees’ lives and the care economy’s overall health.

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