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
- More than eight in 10 working parents say they wish their employer offered some sort of child care benefit.Footnote # 8
- Child care is unaffordable for the 85 percentFootnote # 9 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.
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
Location: Taylorsville • Year Founded: 1989 • Number of Employees: Over 900
The Mitchell Gold + Bob Williams corporate headquarters and manufacturing plant in Taylorsville, a rural town in Alexander county just north of Charlotte, may be one of the few factories in the country with a sand play area, a stage with a reading nook, and a garden for planting vegetables.
This American furniture company’s factory is home to an on-site, education based, not-for-profit full-time child care facility open to Mitchell Gold + Bob Williams’ local employees and members of the community, with space for 77 children from infants to age 12. It’s also one of the few five-star child care facilities in Alexander County.
Chairman and CEO Mitchell Gold, who co-founded the company with President Bob Williams in 1989, said he and Williams decided early on that offering child care would be a core part of their benefit offerings for families.
“Somebody once told me that how you take care of a parent when they’re having their child, especially their first child, really has an impact on that parent and really lets them think long term about who you are as a person, who you are as a company,” Gold said.
“We recognized early on that we had employees with children, and they were distracted. They weren’t giving us their full attention because they were worried about being finished in time to pick up their child, or having to go across town to get their child if something went wrong,” he said.
“If you want loyalty from people, you have to be loyal to them. If you want respect from employees, you have to respect them.”
By removing some of the company’s working parents’ stressors, Gold said Mitchell Gold + Bob Williams has a more engaged, loyal workforce. “Bob and I, early on, recognized that if you want loyalty from people, you have to be loyal to them. If you want respect from employees, you have to respect them.
If you want them to care about you, we have to care about them. All of these things are two-way roads,” he said.
Gabrielle Sinclair, a first-time mom on the human resources team whose toddler currently attends the child care facility, said she is grateful for the chance to have her child closer to her while she works.
“There’s a lot of angst and anxiety that goes along with being a first-time mom as it is, so knowing that your child is being well cared for puts those things at ease,” Sinclair said.
Sample Benefits at Mitchell Gold + Bob Williams
- Medical and dental coverage
- Flexible Spending Account
- Company matched 401K retirement plan
- Staff discount on all products
- On-site health center for employees and families
- On-site café serving breakfast and lunch
- On-site gym