Managing Work/Life Fit: Dependent Care and Elder Care

Overview

Research shows that as many as one in five full-time workers juggle both work and caregiving responsibilities.[i] Those responsibilities extend not only to children but also to parents, other family members and friends. The term "sandwich generation" specifically refers to those who are at the same time caring for an aging parent and raising a child under the age of 18 years.

This toolkit highlights the extent and effects of family care concerns in the workplace and how employers and human resource professionals can proactively manage this aspect of work/life fit.

Business Case

When employees have difficulty juggling caregiving responsibilities, their well-being and productivity can suffer. A 2021 survey of 1,309 people conducted by the Rosalynn Carter Institute for Caregivers found that among employees with caregiving responsibilities:

• 73 percent had to leave work early or unexpectedly.
• 70 percent had to call out from work for one day.
• 68 percent did not take on additional responsibilities or projects.
• 60 percent felt the quality or timeliness of their work suffered.
• 59 percent had to take two or more days off in a row from work.
• 52 percent lost income because they had to miss work.

For employers, these findings are being felt in the form of absenteeism, increased health care costs, lost productivity and turnover. One way to counteract these trends is to help employees with their caregiving responsibilities. See Caregiving Benefits Can Support Workers—and the Bottom Line.

SHRM's 2020 Employee Benefits report (which used data collected in late 2020, and supplemental data in 2021) showed the COVID-19 pandemic caused many employers to revisit and revise their employee benefits last year, many directly affecting caregivers, as highlighted below.

Whether some of these changes were required by law or simply to keep the business running, employers have found that employees want and need these benefits, and if not offered, many employees are willing to look for employment elsewhere.

HR's Role

Human resource professionals are key to the management of an employer's dependent and elder care benefits. In most organizations, HR collaborates with the legal, medical, security or risk management functions on issues related to the design and implementation of the policies and benefits concerning dependent and elder care support. Implementation includes creating and communicating the policies and procedures, selecting reputable vendors, administering the flexible spending accounts, and managing vendors.

HR is also likely responsible for monitoring the overall effectiveness of the program, measuring its results in terms of the program's objectives and reporting periodically to senior management, including recommending modification of the policies and benefits. Monitoring the policies and benefits for compliance with legal and regulatory authorities usually falls to HR as well.

Types of Family Care Benefits

Family-friendly benefits provide cost-effective ways to help employees balance their work and personal lives. The benefits most used and considered helpful by caregivers, according to the Rosalynn Carter Institute for Caregivers survey, are often not offered by employers:

Source: https://www.rosalynncarter.org/wp-content/uploads/2021/09/210140-RCI-National-Surveys-Executive-Summary-Update-9.22.21.pdf

Some of the more common types of caregiver-related benefits are discussed below.

Flexible work arrangements

Allowing employees with caregiving responsibilities the ability to work flexible schedules and telecommute can assist employees with time management by reducing commute time. As many employers have responded to the pandemic with permanent flexible working arrangements for all or most employees, these arrangements have become a key tool in attracting and retaining all talent. See Managing Flexible Work Arrangements and SHRM's Remote Work Resource Hub Page.

Dependent care assistance plan

A dependent care assistance plan (DCAP) is a form of flexible spending account (FSA) that provides a tax-free vehicle for employees to pay for certain dependent care expenses. Dependent care plans can provide assistance up to a value of $5,000 ($2,500 per parent if married and filing separately) tax-free.

DCAP expenses typically include child care costs incurred while the participant (and spouse, if applicable) is working. The expenses must be for a qualified dependent, such as a child under the age of 13 or a tax dependent living in the participant's home. Depending on the type of plan established, employees and employers may be allowed to make contributions into a DCAP. See What Is a Dependent Care Assistance Plan? and What kinds of childcare expenses can be reimbursed under a Dependent Care Assistance Program (DCAP)?  

Resource and referral services

These are vendors who typically provide counseling and resources to employees seeking assistance with elder or dependent care issues, such as temporary emergency care for an elder family member or longer-term strategies for identifying appropriate child care providers.

Elder care resource and referral services, including geriatric care management services, are sometimes provided through an employer's employee assistance program, whereas other employers contract with outside vendors that are available at all hours via a toll-free phone number. Employers can also check to see if state agencies provide this type of referral service in the employer's area.

SHRM's 2020 Employee Benefits report found that 15 percent of employers offer referral services, while 11 percent provide access to information on other elder care services.

Paid or unpaid leave

Leave that is paid and provides job protection can be a lifeline to employees with caregiver responsibilities. Even approved, unpaid leave can give an employee the bit of space they need to sort out caregiving issues and return to full productivity at work.

Paid-time-off (PTO) policies typically provide full- and part-time employees with paid time away from work that can be used for vacation, personal time, personal illness or time off to care for dependents. According to SHRM's 2020 Employee Benefits report, 66 percent of employers used a PTO bank system allowing employees more freedom and flexibility in managing their leave.

The report also found that 31 percent of employers offered family leave beyond the twelve weeks of FMLA leave, and 16 percent specifically offered elder care leave beyond any FMLA leave entitlement. These are both increasing trends, reflecting an awareness of and support for employee caregivers needs.

Paid parental leave is also an increasing trend. In fact, U.S. states that have implemented paid-leave policies found a 20 percent reduction in the number of female employees leaving their jobs in the first year after giving birth—and up to a 50 percent reduction after five years—according to a study for the March of Dimes Center for Social Science Research. The study, conducted by the nonprofit Institute for Women's Policy Research (IWPR), analyzed labor market participation among women in California and New Jersey before and after each state launched a paid family and medical leave system. In addition, the researchers found that:

• Over the long term, family PTO nearly closed the gap in workforce participation between mothers with young children and women without minor children.

• For women without access to family PTO, nearly 30 percent dropped out of the workforce within a year after giving birth and one in five did not return for over a decade.

See Paid Family Leave, on the Rise, Helps Women Stay in the Workforce

Onsite child care or backup dependent/elder care

Benefits cited by some employers offering onsite child care include reduced absenteeism and turnover, improved morale, and higher productivity. There also are tax advantages. Nonetheless, many employers find the expenses associated with running an onsite or near-site child care facility prohibitive.

Onsite child care also creates legal exposure for an employer. Organizations operating a child care center may be held liable for unsafe premises, toys, equipment and actions of the center's employees. All states regulate child care, and many require employers to obtain liability insurance as a condition for child care licensing. Employers can purchase child care liability insurance to reduce potential liability as either part of their existing liability policy or as a separate policy. However, tort, criminal and contract laws for a particular state may affect the availability and affordability of obtaining liability insurance.

Even when employers cannot offer onsite care, some offer backup care options. Backup care—including policies that allow a parent to bring a child to work in an emergency or a network of providers available for emergency elder care —provides a safety net for employees, offering a temporary alternative so employees can get to work when their regular arrangements are unavailable. Backup care is often used to accommodate school holidays or closures, caregiver vacations, and dependents recovering from illness or surgery.

Almost a third of respondents' to SHRM's 2020 Employee Benefits report said their organizations allowed employees to bring their children to work in an emergency, 4 percent allowed infants at work on a regular basis, and 6 percent offered a subsidized child care center or program. See Employers Consider Child Care Subsidies. 

Legal Issues

Family care bias/family responsibilities discrimination

Expectant mothers, parents of young children, and employees with aging parents or sick family members should not be subject to discrimination based on their caregiving responsibilities. Employers should avoid stereotypes regarding the impact on job performance due to family care needs and focus on supporting these workers to be successful in the workplace.

There are legal risks for employers who neglect to recognize the plight of caregivers or who treat caregiver employees more negatively than other employees. A growing number of workers are winning lawsuits claiming that their bosses have discriminated against them based on their family responsibilities.

The details of some of these cases are troubling. For example:

• A female employee was told it was "too bad" she got pregnant after the promotion that had been promised her was given to a man.
• After applying for a position, a father was told that the job had been "specifically designed for single males without children."
• A woman was instructed to accept a demotion or go on leave because she couldn't do the job of co-director while pregnant.

These are egregious examples; caregiver discrimination is often much more subtle, like when a manager gives better assignments to those without known family responsibilities. A supervisor's actions can still be discriminatory, though well-intentioned. That's why employers need to be on the lookout for risky rules and practices.

See:

How to Recognize—and Avoid—Caregiver Discrimination

Custodial Dads Are a Workplace Anomaly, but Their Challenges Are Familiar.

EEOC Enforcement Guidance: Unlawful Disparate Treatment of Workers with Caregiving Responsibilities

Employers should also ensure that their work/life policies do not inadvertently favor working parents or caregivers over those employees who not have children or other caregiver responsibilities. These employees may also have untraditional caregiving responsibilities that may be overlooked with a strict policy definition. Employers should also make certain that men have the same flexibility and options available to them as their female co-workers regarding managing family responsibilities.

In addition, a disparity currently exists under many employer health plans. Because employers are paying more in health care premiums for families, and benefits make up a considerable piece of the total compensation package, employees with family coverage are paid proportionately more than those with single coverage. If access to benefits becomes more limited due to increased costs, employers may see more friction between employees based on the perception that some have better benefits than others due to lifestyle choices or age. SeeSingle vs. Married Employees' Benefits Aren't Equal.

Along with perceived flexibility and benefits disparities, employees without dependents may also be required to carry the load for employees with caregiving responsibilities, particularly when such employees are on extended leaves. When employees reduce their work hours or use family and medical leave, frequently employees without dependents must shoulder the additional workload, usually without any additional compensation. Working caregivers may not be able to work late or be flexible with their schedules, often to the disadvantage of their office mates. Employers will want to look for ways to ensure equity among all workers to avoid feelings of unfairness among coworkers. See Employer Best Practices for Workers with Caregiving Responsibilities and All Things Work: Cynthia Calvert on Family Responsibilities Discrimination at Work (podcast).

Paid or unpaid leave

The federal Family and Medical Leave Act (FMLA) and some state laws provide employees with unpaid job-protected leave to care for family members. See Managing Family and Medical Leave.

Several states have enacted paid family leave laws funded through state payroll taxes. Check for laws using SHRM's Multistate Laws Comparison tool and select Family, Medical and Parental Leave when selecting state laws.

Federal legislation requiring paid family and medical leave for employees has been introduced by congress on several occasions but has yet to be passed into law. The latest example is part of the Build Back Better Act, which as of Feb. 2022 has stalled in the U.S. Senate. As a major concern for working families, federally required paid leave proposals will continue to be introduced for the foreseeable future and may one day be a reality. See House Passes Build Back Better Act with Paid-Leave and ACA 'Firewall' Provisions.

Employers that offer separate vacation and sick leave banks often allow employees to use sick leave to care for an ill family member. However, employers should review their internal definition of "family member" to align with the needs of the current workforce. As an example of an inclusive definition of family, the New York City Human Rights Commission protects caregivers from discrimination and defines covered relatives as children (adopted, biological or foster), spouses, domestic partners, parents, siblings, grandchildren, grandparents, children or parents of the caregiver's spouse or domestic partner, or any individuals in a familial relationship with the caregiver.

Communication and Tax Issues

Employers must effectively communicate dependent and elder care benefits to employees, outlining both the benefits and any potential tax consequences of using the programs offered.

The FSA "use it or lose it" rule, requiring employees to forfeit to the employer any unused funds in their FSA annually, has discouraged many from participating in a DCAP program. The Internal Revenue Service (IRS) attempted to take some pressure off employees with Notice 2005-42, which permits employers to extend the deadline to use FSA funds up to two and a half months after the end of the plan year. For example, if the plan year ends on December 31 and the employer has modified the plan to allow the extension, employees have up to March 15 to deplete their FSA account. If the extension period has passed and the account still contains money, the money will be subject to the "use it or lose it" rule, and the balance will be forfeited to the employer. Employers need to effectively communicate these rules to employees at the time of enrollment and throughout the plan year to avoid disgruntled employees who experience losses.

FSA DCAP assistance above $5,000 ($2,500 per parent if married and filing separately) is taxable income. See IRS Fringe Benefit Exclusion Rules for Dependent Care Assistance.

There is a federal tax credit for employers who voluntarily offer paid family and medical leave. To receive the credit, employers will have to provide at least two weeks of leave and compensate workers at a minimum of 50 percent of their regular earnings. See Taking Advantage of the Federal Paid-Leave Tax Credit and Leave Policy: Paid Family and Medical Leave.

Global Issues

U.S. employers with employees in other countries will need to decide whether and how to tailor their dependent and elder care programs to comply with applicable international laws, regulations and business practices. Employers will need to identify what those laws and customs are, and with the advice of legal counsel, recommend a strategy that addresses the legal parameters and practical constraints of administering any policy or benefits-related program. Each employer must take into account cultural issues, including the role of each family member in the host country.

Endnote:

i) Rosalyn Carter Institute for Caregivers. (Sept. 28, 2021). Retrieved from: https://www.rosalynncarter.org/wp-content/uploads/2021/09/210140-RCI-National-Surveys-Executive-Summary-Update-9.22.21.pdf