On-Site/Consortium Sponsored Child Care
On-site child care is located at an employers’ workplace and can be full-time care or back-up care. Consortium sponsored child care is a partnership between employers to finance a child care program, often run by a contracted operator and located near both workplaces. For both on-site and consortium care, employers can subsidize the cost of care, or employers can ask employees to pay full cost for care.
Benefits to EmployersFootnote # 1
- Increases retention, reducing turnover costs
- Allows a federal 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 child care facility expenses
- Improves employee performance and reduces absenteeism compared to when using off-site child care
Benefits to ChildrenFootnote # 2,Footnote # 3
- Improves overall health
- Access to quality child care 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/FamiliesFootnote # 4
- 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
Research or Recommendations from National Organizations
Employers who want to establish an on-site child care facility should:
- Assess employee need. Employee input is vital to ensuring that child care options meet employee needs with regard to availability, affordability and accessibility. You can start by assessing need with this employee survey.
- Explore the tax benefits. Providing child care 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 child care vendor to provide the care.
- Connect with a provider currently operating an employer child care facility. This will allow you to learn more about operational costs and logistics.
- Consult with your legal counsel to understand the regulations surrounding a child care facility on site.
Employers who want to explore consortium-sponsored care should:
- For a consortium sponsored child care arrangement, employers should set clear policies and procedures that ensure equity among coworkers and a location that works for the group.
- Ensure enough availability for all employees. You can start by assessing need with this employee survey.
Employers considering child care benefits should explore the tax benefits. Employers can receive a federal tax credit of up to 25 percent of qualified child care expenditures and 10 percent of qualified child care 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.
Range of Practices in the United States
- Child care was difficult for families to find even before the pandemic, and the pandemic has made it more difficult to find and keep child care.Footnote # 5
- Yet just 11 percent of workers had access to any workplace child care benefit in 2021.Footnote # 6
- Low-wage workers, who often have the greatest difficulty finding and paying for high quality child care, are less likely to receive child care benefits at work. Only six percent of workers whose wages were in the bottom 10 percent had access to any child care benefit in 2021.Footnote # 7
- Child care is unaffordable for the 89 percent of parents, who spend 10 percent of their income or more on care. The U.S. Department of Health and Human Services has estimated that affordable care should cost no more than seven percent of a family’s total income.Footnote # 8.
Let’s Get Started.
Offering child care on-site or through a consortium sponsored model can seem daunting. Need additional support?
Partner with the Child Care Services Association (CCSA). The Child Care Services Association (CCSA) can support employers in preparing an RFP to select a provider to run a child care center. Email Dr. Linda Chappel, Senior Vice President of CCSA, at lindac@childcareservices.org.
Partner with a child care resource and referral agency. To find an agency near you, search the North Carolina Child Care Resource and Referral Council’s online directory. Agencies can help by offering:
- On-site classes for employees who are parents.
- A review of employers’ organizational work- life culture and guidance on developing family-friendly policies and procedures.
- Guidance on employer-sponsored subsidies to help employees afford the cost of child care.
- Assistance setting up and implementing on-site child care.
- Assistance developing an emergency plan for on-site child care in the case of inclement weather, natural disasters, or other emergencies.
- Help with child care referrals for parents.
Case Study
In Cabarrus County, a public-private child care partnership is creating buzz as a new way to help solve the child care crisis within local communities.
“We’re hoping others will see what we have done and model it. During this child care crisis, it is important to think about innovative solutions to child care accessibility and affordability,” says Carla Brown, the County’s Early Childhood Education Coordinator.
In March of 2020, just as the pandemic was ramping up and many child care centers were forced to close, the Cabarrus County Early Childhood Task Force Advisory Board recommended a public-private partnership to expanded child care to the Board of County Commissioners. The board supported the recommendation, and a partnership between Cabarrus County government and All Saints Episcopal Church was formed with a goal to open a child care center at the church for use by county employees and the community. The site would also serve as a practicum site for Rowan-Cabarrus Community College students as they seek real-world experiences with children.
The Lockhart Child Development Center, which opened its doors on September 27, 2021, serves as a model of the benefits of quality early education for children and a road map for how public-private partnerships and employers can support families with their child care needs.
Like much of North Carolina, Cabarrus County is a child care desert. Countywide, 74 percent of infants and toddlers with working parents need care, but only 26 percent of centers have available space. When child care is unavailable, working families (and disproportionately mothers) must cut back at work or leave the workforce altogether, losing income and, often, risking their family’s economic security to keep a caregiver at home. This in turn impacts businesses, who face workforce shortages or recruitment and retention issues when fewer people are able to work.
“Having two kids in child care at the same time costs as much as a decent full-time job pays, so it makes sense that some folks just opt to stay home to raise their children. The County subsidized tuition allows us to access quality and affordable care options for our children and stay in the workforce, which benefits everybody.”
Jarrett Glass, father of two and broadcast AND PRODUCTION MANAGER
Jarrett Glass, a broadcast and production manager for the County and a father of two children who go to Lockhart, is clear about what would happen in his family if child care was unavailable.
“No child care means one of us would have to quit our jobs or work part-time to watch and raise our children until they become school-aged. That can be a dangerous situation and, if things don’t work out, could present some real financial hardship,” Jarrett says.
It’s important to help employers as well as local and state leaders understand challenges families must navigate, Carla says.
“If we can increase awareness about child care accessibility – what it is and what families face – then we want to do that,” she says.
To open Lockhart, the County made a one-time grant of $225,000 from its Coronavirus Aid, Relief, and Economic Security Act (CARES) funds to support start-up costs, wages and a playground replacement. An additional $375,000 covered the first year cost of subsidizing tuition for employees with a reoccurring annual expense of $275,000 for that purpose. Significant remodeling expenses were funded entirely by All Saints parishioners and a Cannon Foundation grant.
Currently, there are 68 children enrolled in the program, which serves children from birth to five. Lockhart has the highest quality rating from the state, and tuition ranges from $1,000-1,200 per month depending on the age of the child. County employees pay 50 percent out-of-pocket, or $500-600 per month. This subsidy from the county is significant for families, especially considering child care tuition in the County costs more on average than in-state college tuition, from $10,986-11,952 on average per year for one child.
The county reserves 40 of the licensed slots for employees, and the remaining slots are open to the community. Unfilled County slots are available to the community as well; however, priority is given to county employees if an opening occurs up to the 40 reserved slots.
Jarrett, who has worked for the County for nine years, says his family moved to Cabarrus County from Charlotte because he was hoping for more “normal” 9-5 work hours, which can be a difficulty in the television industry. He was worried about finding care for his children – Rocco, age four, and Charlie, 7 months – and is very happy with the quality of care his children are receiving at Lockhart. Plus, the fact that the county assists with tuition makes the benefit “extremely valuable.”
“Having two kids in child care at the same time costs as much as a decent full-time job pays, so it makes sense that some folks just opt to stay home to raise their children,” Jarrett says. “The County subsidized tuition allows us to access quality and affordable care options for our children and stay in the workforce, which benefits everybody.”
Carla says the partnership that created Lockhart is a key piece to Cabarrus County’s efforts to impact early childhood systems and further the County’s progress on their Early Childhood Action Plan (ECAP) which aligns with the measures laid out in the North Carolina Early Childhood Action Plan. The plan, developed in response to an executive order issued by NC Gov. Roy Cooper in 2018, recommends concrete measures and steps counties and municipalities can take to achieve better health and well-being outcomes for children. The action measures established by the North Carolina Early Childhood Foundation’s Pathways to Grade-Level Reading initiative served as a framework for the statewide action plan, and family-friendly supports such as child care and paid leave are called out in the recommendations.
As a parent, Jarrett says he’s thankful for the child care support, and he’d love to see the County consider more benefits, like extending its maternity and paternity leave programs (currently six weeks’ leave for mothers and no leave for fathers) to remain competitive.
With any future policy changes, higher retention rates, lower absenteeism, and employee satisfaction remain top of mind, Carla says.
She says she also hopes the County will inspire other local employers to become more family friendly – and she’s already seen some success when it comes to child care.
“A couple of new businesses, coming to the county, are being proactive and have reached out to local leaders to discuss anticipated employee child care needs and possible solutions,” she says.