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On-Site or Consortium Sponsored Childcare

On-site childcare is located at an employers’ workplace. For consortium sponsored childcare, employers join forces to finance childcare run, often run by a contracted operator. Employers can subsidize the cost of care so employees can pay below-market rates, or employers can ask employees to pay full cost for care.

Benefits to Employers

  • Increases retention, reducing turnover costs
  • Allows tax credit of up to 25 percent of facility expenditures, plus 10 percent of any resource and referral expenditures, up to $150,000 in a calendar year; business expense tax deductions for remaining childcare facility expenses
  • Improves employee performance and reduces absenteeism compared to when using off-site childcare
  • Increases employment of women
  • Increases employee loyalty

Benefits to Children

  • Improves overall health
  • Access to quality childcare improves high school graduation rates, overall educational attainment
  • Access to an on-site facility may increase breastfeeding duration, which offers a health benefits for children and mothers

Benefits to Parents/Families

  • Improves family economic security
  • Saves employees time
  • Highly ranked as a benefit, even by employees who do not have children
  • Access to an on-site facility may increase breastfeeding duration, which offers health benefits for children and mothers

Employers who want to establish an on-site childcare facility should:

  • Start by talking with employees. Employee input is vital to ensuring that childcare options meet employee needs with regard to availability, affordability and accessibility.
  • Explore the tax benefits. Providing childcare can be expensive, but many of the costs can be taken as a deductible business expense or as a tax credit.
  • Identify a high-quality childcare vendor to provide the care.
  • Consider connecting with a provider currently operating an employer childcare facility to gain understanding of operational costs.

Range of Practices in the United States

Only 10 percent of workers had access to any workplace childcare benefit in 2017.

Just three percent of more than 3,000 US employers surveyed by the Society of Human Resources Management offered access to a full-time childcare facility (subsidized or un-subsidized) in 2018.

Low-wage workers, who often have the greatest difficulty finding and paying for high quality childcare, are less likely to receive childcare benefits at work. Only two percent of workers whose wages were in the bottom 10 percent had access to any childcare benefit in 2017.

More than eight in 10 working parents say they wish their employer offered some sort of childcare benefit, and more than seven in 10 parents say their work has been impacted by childcare falling through.

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