Employer Provided Benefits

The federal government offers this type of Flexible Spending Account through employers. Like the Child and Dependent Care tax credit, families are eligible if both spouses (or the parent in a single-parent household) are working or going to school and if their children are under the age of 13. If your job offers a Dependent Care Account , you can put aside up to $5,000 in pre-tax dollars to pay for child care expenses and save approximately $2,000 by contributing the maximum.

How to set up a dependent care FSA

Through MI Tri-Share , the cost of an employee’s child care is shared equally among the employer, the employee, and the State of Michigan — a three-way split — with coordination being provided regionally by a MI Tri-Share facilitator hub.

West Michigan has two Tri-Share hubs to assist your business and provide regional coordination:

Kent County: Vibrant Futures
Facilitator Hub Contact: Chana Edmond-Verley (chanaev@vibrantfuturesmi.org)

Lake, Mason, Muskegon, Newaygo, Oceana and Ottawa Counties: Goodwill Industries
Facilitator Hub Contact: Catrina Rule (crule@goodwillwm.org)

A childcare subsidy is a broader term for any form of direct financial assistance from an employer for childcare, while a voucher is a specific type of subsidy involving certificates redeemable at pre-approved childcare providers in the employer’s network. Employers with 250+ employees can partner with The Learning Experience childcare center and offer their employees a 10% discount.

Employers can contribute up to $5,000 a year to the cost of each employee’s child care without the subsidy or voucher being added to the employee’s taxable income.

Employers can receive a federal tax credit of up to 25% of qualified childcare expenditures and 10% of qualified childcare resource and referral expenditures. The credit is capped at $150,000, so employers would need to spend about $430,000 total to receive the full credit. Additional investments beyond the cap are not deductible.

Employer Guide to Childcare Assistance and Tax Credits

Employers can provide childcare subsidies or vouchers in a number of ways:

• Give vouchers directly to employees with children to spend however they see fit
• Partial or full payment for child care with employer-approved child care providers
• Contribute to an employee’s dependent care flex spending account
• Expense reimbursement (e.g., a percentage of the total cost of child care)
• A one-time bonus or regular bonuses, paid monthly
• Tuition discounts for employees who use a provider in an established company network
• Paying membership fees for an online emergency or back-up care program
• Subsidize the cost of care at an on-site childcare center

Employer-sponsored back-up childcare assistance gives employees a safeguard for when spouses get sick, schools close, and other unexpected issues arise. For businesses, back-up childcare assistance is a highly effective and moderately inexpensive benefit. Businesses partner with service providers to offer complimentary emergency child care at an employee’s home or at the provider’s local location. 

What to look for in a Backup Care Program

Backup care programs such as Care for Business , connects working parents with gaps in child care coverage to vetted, quality childcare options at low or no cost. Companies can structure back-up childcare assistance benefits as they do sick days. For example, employees are entitled to a certain number of days but after are required to pay a partial fee.

Upwards is a free online resource to locate childcare centers that accept drop-in and back up care in West Michigan.

Flexible scheduling allows employees to adjust their work hours and days to accommodate their childcare needs and adjust to unforeseen schedule changes. No matter what type of flexible schedule you choose to offer, the immediate impact on culture will be felt throughout the organization. There are several ways to execute flexible scheduling at a low cost and using minimal resources. 

Managing Flexible Work Arrangements

An on-site child care can provide high quality early education and preschool that working parents want for their family. Offering employer on-site child care at your company is a great way to attract and retain employees, as well as boost their productivity by providing a convenient location for child care. In a recent study, 90% of respondents indicated that the option of onsite daycare makes them more likely to continue to work for their organization, and 92% of respondents agree that it positively impacts their overall well-being. When companies provide access to quality child care with convenient locations and hours, the result is happier, more engaged, loyal workers who value their employer’s support.

Organizations such as Outdoor Discovery Center , KinderCare and Bright Horizons can assist employers in the development and management of your on-site child care center.

Employee Assistance Programs (EAPs) and Employer Resource Networks (ERN) can facilitate an array of services that will bolster benefits packages and provide substantive assistance to employees in addressing childcare needs. 

Contact your benefits broker for eligible childcare navigation services through your EAP.