Childcare Benefits Glossary: Key Terms for Employers, HR, and Benefits Professionals

The employee childcare benefits landscape is constantly evolving, and organizations are being tasked with staying ahead of the curve. To keep up with the latest developments, you need a Childcare Benefits Glossary to recognize all the various terms and phrases.

With more and more employers in every industry considering expanding their benefits packages for employees, it’s crucial to understand how childcare benefits work and why they are so beneficial.

At Upwards, we have conversations with organizations daily about their care benefits and how they can leverage the largest childcare network in America to help support working families and their own bottom line.

Chat with our team about childcare benefits for your employees.

We created this glossary to help you decipher important terms as you determine what type of childcare benefits program is the best fit for your workforce. Make sure to check back regularly, as we’ll continue to add more key phrases!

Absenteeism

A pattern of unplanned absences at work.

Why it matters: Childcare issues for employees lead to them missing time at their jobs and absenteeism is the top concern among employers looking to solve HR challenges by implementing a childcare benefits program.

Babysitters

A type of caregiver who typically travels to the family’s home to care for children or may transport kids to different activities at various times.

Why it matters: Babysitters provide flexible, crucial childcare for busy working parents who are managing their kids’ calendars along with their job responsibilities. Whether it’s picking up kiddos from practice or getting children to sleep because a parent is working late, a great babysitter can be as good as gold for many families.

Backup care

Childcare that is needed but can’t be planned for in advance.

Why it matters: Parents sometimes need a backup to their regular childcare arrangement, or find themselves in an emergency or with a last-minute change of plans. With many families managing fluctuating schedules, non-traditional work hours, and parents looking for jobs, backup care is an incredibly important part of the overall childcare benefits landscape.

Caregiver

Someone responsible for the care of another person, often young children.

Why it matters: Caregivers come in many different forms, from daycare providers and preschool teachers to babysitters and nannies. Finding a flexible childcare benefits program, with multiple types of caregivers, is crucial for employees as well as employers.

Childcare assistance

A benefit program where the core function is helping working parents find quality childcare providers for their families.

Why it matters: A childcare assistance program is an economical way to get started with childcare benefits, support employees, and assist working families with their basic care needs. Fortunately for employers, employee childcare benefits like childcare assistance also provide valuable ROI and help organizations end up in the black on the balance sheet

Childcare benefits

A program employers set up to offer benefits to employees centered around the childcare needs of working families, including finding and affording suitable childcare.

Why it matters: Childcare benefits for employees are a powerful way for employers to support their workforce while simultaneously addressing organizational challenges. Absenteeism, presenteeism, retention, and more competitive recruitment are all impacted by adding an employer-sponsored childcare benefits program.

Childcare benefits ROI

The specific return on investment that employers see on their balance sheet when providing childcare benefits for employees.

Why it matters: Employers gathering information about different employee childcare benefit programs need all the data they can get when making these types of decisions. How much to spend on childcare benefits in the short term vs. how much money will be saved in the long run is crucial information to have at your disposal.

Childcare centers

A type of childcare facility typically represented as a large daycare or early learning setting, catering to families with infants, toddlers, and preschoolers.

Why it matters: Childcare centers are common and the term is used often in employer-sponsored childcare benefits discussions. These types of facilities differ from home daycares, as well as nannies and babysitters.

Childcare crisis

An umbrella term for the ongoing lack of access to affordable childcare for families and limited wages for childcare workers caused by decades of underinvestment. The childcare crisis has resulted in negative cascading effects for the economy and societal infrastructure.

Why it matters: Having reliable childcare is crucial for workers, their employers, and the economy as a whole. Working parents miss out on an estimated $37 billion a year in lost income due to insufficient childcare, while organizations lose over $13 billion a year in lost productivity because of decreased employee output, hiring expenses, and work interruptions.

Childcare marketplace

Online community connecting parents needing care with childcare providers able to provide it.

Why it matters: A childcare marketplace helps match available caregivers with families who need childcare, including employee families utilizing a childcare benefits program provided by their employer.

Childcare stipends

A set amount of money allotted in regular intervals by employers to employees for childcare expenses.

Why it matters: Childcare is very expensive and most working parents struggle to afford quality caregivers for their children. An employer-provided subsidy for childcare can be the difference between a family accessing childcare at all and an employee having to leave their job in order to care for their child.

Childcare tax credits

State and federal government tax credits offered to employers as an incentive to provide childcare assistance to their employees.

Why it matters: Although they’ve been offered for 20 years, childcare tax credits have been underutilized by employers. Organizations have a big opportunity to support their workforce, reap the childcare benefits ROI, and receive a tax break in the process.

Child-to-teacher ratio

The relation of the number of children to the number of teachers or caregivers in a given childcare setting.

Why it matters: Most parents and experts find that a lower child-to-teacher ratio is better, as it allows more time and attention for the children. In-home daycares, babysitters, and nannies generally provide lower child-to-teacher ratios than large childcare centers.

Curriculum

The activities, learning materials, and experiences that make up a child’s time while in care.

Why it matters: A developmentally appropriate curriculum fosters important growth and cognitive progress in children, including social-emotional learning.

Employer-Provided Child Care Credit

A federal tax credit for employers of up to 25% of qualified care expenditures, and 10% of qualified childcare resources and referral expenditures.

Why it matters: Businesses can claim up to $150,000 in childcare tax credits, which can make a big difference for employers deciding on which childcare benefits programs to select to best support their workforce.

Employer-sponsored childcare

When an organization offers help and resources to assist their employees with finding childcare and, potentially, paying for childcare expenses.

Why it matters: Families struggle to find convenient, affordable childcare and are expected to spend up to 20% of their income on care expenses. This is unsustainable. Extending childcare benefits to employees is sound business for employers because it typically leads to increased job satisfaction, a boost in productivity, increased retention and recruitment, as well as reduced absenteeism.

Family childcare provider

A caregiver providing childcare services out of their home — also called an in-home childcare provider.

Why it matters: As one of the most common and affordable forms of care available to parents searching for options, family childcare plays a vital role in the overall childcare landscape. Flexibility, convenience, cost, and low child-to-teacher ratios are all distinct advantages of this type of care.

Home daycares

A daycare which is set up in a caregiver’s own home.

Why it matters: Along with childcare centers, home daycares are one of the most common types of childcare found throughout the United States. Home daycare providers are licensed for smaller class sizes than larger centers and typically offer more flexibility for busy working families.

Nannies

A type of childcare provider who is typically a full-time caregiver for a family, or sometimes multiple families when nanny sharing.

Why it matters: Along with babysitters, nannies provide crucial, flexible childcare in a family’s own home or on the go when traveling. A nanny may work with a family for many years, forming a special bond over time.

On-site childcare center

A childcare center based within the physical location where employees work, often at or near an organization’s headquarters.

Why it matters: On-site childcare centers are one solution employers consider when weighing their childcare benefit options. However, there are potential drawbacks — including limited schedules and waitlists for employees plus significant costs for employers — that simply don’t work for many families and their organizations.

Presenteeism

The practice of employees showing up for work despite illness, anxiety, injury, etc., which often leads to reduced productivity and a higher possibility of mistakes on the job.

Why it matters: Presenteeism can be caused by a lack of reliable childcare, resulting in reduced productivity levels and negative consequences for the employer. Working parents who have their childcare situations solved are far less likely to force themselves to juggle a typical workday with caring for their children at the same time.

Retention

The capacity of an organization to retain its current employees.

Why it matters: It is very expensive to replace workers. The average cost of replacing employees is 20% of their annual pay! If an organization struggles with retention issues, implementing a childcare benefits program can help alleviate these and other personnel challenges employers are facing.

Recruitment

The practice of hiring and enticing employees with competitive salary and benefits packages, including employer-sponsored childcare benefits.

Why it matters: Hiring and acquiring talent are consistent organizational challenges many employers face, especially when the labor market is tight and job candidates can be highly selective about where they work next. Leveragingemployee childcare benefits for more competitive recruitment can be an ace up a hiring manager’s sleeve.

School-aged children

Kids that are old enough for K - 12 education, typically ranging from 5 - 18 years of age.

Why it matters: Traditional childcare centers often only cater to families with young children up to age 5 or 6, leaving out school-aged children. Because of the misalignment between school schedules and most working parents’ hours on the job, childcare is still needed for scores of children of school age, often up to about age 12.

Stipend

A designated sum of money, typically allotted monthly or annually, for employees to use towards their childcare costs.

Why it matters: Childcare remains unaffordable for many working parents, causing undue stress for families as well as ripple effects for employers and the economy at large. Employee childcare benefits options are available in many forms, with stipends a very effective way for employers to support their workforce’s childcare needs.

Tuition support

Monetary assistance is provided by employers to employees to pay for a portion of childcare expenses, often weekly or monthly daycare tuition.

Why it matters: Many employees struggle to afford the childcare they need in order to remain in the workforce, making tuition support from employers a vital lifeline for working families.

Tutors

A person who provides general or specialized academic support to children and families.

Why it matters: Some families with school-age children may have their childcare situations all figured out, however, their kids might need assistance with studying certain subjects beyond what parents or guardians can offer. Tutors provide a form of childcare during after-school hours as they study one-on-one with the kids they’re teaching.

What other childcare benefits questions do you have?

We will continue updating our childcare benefits glossary as new terms present themselves. Are there any questions or clarifications we can assist you and your team with in the meantime? Let us know, and we look forward to our conversation!