Emergency childcare: the options

Emergency childcare can have tangible benefits for both employers and staff, explains Vicki Taylor

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Emergency childcare is one of those perks where the advantages are just as tangible for employers, if not more so, than for employees.

The services that can be offered to staff range from providing childcare at short notice via a helpline or website paid for by the employer, right down to a facility that can provide staff with a list of emergency childcare providers in their area, which is offered as part of an employee assistance programme (EAP). Some employers also offer access to a local or workplace-based nursery with reserved emergency places or an in-house childcare co-ordinator who will find emergency care.

The amount that employers are prepared pay towards emergency childcare costs varies considerably. In more lucrative sectors, such as financial services, organisations will often pay for all or part of an employee’s costs, while in those with more limited budgets, childcare places or a search facility may be provided, but the childcare is not paid for.

But, whatever help is given or paid for, the service is sure to prove beneficial as the average working parent has around nine childcare breakdowns each year, according to Venetia Wickham, operations manager at provider Emergency Care. “I think it is a hard choice for parents whether to take the day off work or find back-up childcare. By offering emergency childcare [organisations] are reducing absenteeism and [projecting] an image of themselves as a family-friendly employer,” she explains.

Cynics might say that organisations providing emergency childcare are just looking after their own interests by making sure an employee doesn’t take time off when their childcare provisions breakdown.

However, Emily Wrenn, business development manager at emergency childcare provider Bright Horizons Family Solutions, says employees often view emergency childcare positively, particularly if employers can provide a nursery place. “[Many families] have essentially said that [it] has been a lifesaver. They have had important presentations or client meetings and they have been able to go to work with the confidence that their child is being well looked after.”

Susan Hetrick, head of employee relations and business change at the Royal Bank of Scotland (RBS), also doesn’t view the emergency childcare offered by her employer as a benefit designed just to make sure that she attends work.

Spousal support

Staff at RBS’ global headquarters in Gogarburn, Edinburgh and those based at its other Edinburgh offices can each access 20 free emergency childcare days a year at the headquarter’s nursery facility.”[When] myself and my nanny had flu, and we were both off work sick, my husband, who doesn’t work for the organisation, called up the nursery and they managed to secure a place for a couple of days for my three-year-old son because neither my nanny or myself were capable. [It meant] my husband was able to attend work,” says Hetrick.

Traditionally, corporate emergency childcare has consisted of an employer buying permanent spaces at a nursery near the workplace. However, this can have its drawbacks. “It is no good if your child is over five [years], it is no good if your child is not very well and it is no good if you don’t want to commute with your child,” Emergency Childcare’s Wickham explains.

Providing emergency childcare through a nursery at the employer’s premises is the most tax-efficient option. Graham Morgan, corporate and business tax partner at accountancy firm Kingston Smith, says: “Places at a workplace nursery are entirely tax-free, regardless of how much it costs, for the employer and the employee. There are conditions that it has to satisfy [though], like it must be available to all employees.”

Where employers pay for childcare this can be set against profits. Any payment up to the value of £55 a week will be free of national insurance and tax for the employee, but payments by the employer above this amount will be treated as a benefit-in-kind and taxed at the same rate as the employee’s salary.

“If someone [has] to work late and pay the childminder for an extra few hours and looks to the employer to reimburse that cost, unfortunately, that’s taxable and treated as pay,” says Kingston Smith’s Morgan.

Of course, for some employers, paying for emergency childcare is not viable. However, Wickham explains there is a clear difference in take up where employers make a contribution. “We have two companies [as clients which] both have 1,000 employees. One is offering four full days a year [free] and [the other] is offering to make no contribution. In the first month, we had nine [staff from the first company] making a booking and [the other firm] didn’t have any.”

For some employers, a service which points staff in the right direction may be the most they can afford. P&MM is just one firm that offers a helpline giving details of emergency childcare providers. Richard Davies, head of employee benefits at P&MM, says: “[The helpline gives] an option of various carers and it is then down to the parent to make the emergency childcare payment,” he says.

He adds that the service, which is offered with P&MM’s EAP and as an optional extra to employers with childcare voucher schemes, is a “stop-gap measure”. Although under no illusions that the service is perfect, Davies believes it might be useful to some employees. “At the end of the day, most parents go through quite a vetting exercise before placing their child. Clearly, with this option that is not available. [However, if] they are going in for an emergency operation and just have to get someone [to care for their child], it is an option they can take.”

Some EAPs go further, but employers will have to pay more for the service. EAP provider Employee Advisory Resource offers a service in conjunction with emergency childcare provider Bright Horizons. In this case, the councillor at the end of the phone will find childcare spaces. Allen King, managing director of Employee Advisory Resource, says: “It is the difference between providing a service to employees and just providing them with an enhanced Yellow Pages.”

Whether an employer decides to go for an all-singing, all-dancing option or something more basic, at least they can rest assured that this is one perk that works for both parties.

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Case study: PricewaterhouseCoopers

Professional services firm PricewaterhouseCoopers introduced a pilot emergency childcare scheme for staff in five of its offices in May 2006. The pilot, which is running for an initial 12-month period, provides staff in London, Birmingham and the East Midlands, Manchester and Edinburgh with access to five free days of emergency childcare over the course of the year.

The scheme was launched after the company carried out a survey of employees’ issues in 2004. Carolyn Wilkinson, senior employee benefits manager, says: “One of their problems was the childcare issues where their [normal] arrangements had let them down.”

The emergency childcare places are offered through a national childcare provider. “We have paid in advance for a fixed number of days [and] if we do not use all of those days, we can carry those over to the next year,” explains Wilkinson.

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Case study: University Hospitals of Leicester

Employees at the University Hospitals of Leicester have access to three on-site day nurseries that can help with emergency childcare. As the nurseries operate on around 80% capacity, there is always the chance that a place can be offered on an emergency basis and staff are able to see if a place is available at short notice.

Janet Guilford, in-house childcare co-ordinator, says that this is part of the organisation’s service to its employees and its patients. “If a member of staff has to be off to look after their child, that can put pressure on the ward and operating theatres, which has an impact on patient care. [Staff] are positive about it because they know their child is being cared for [so] they can go and do their job as usual and not take time off,” she explains.

The organisation does not cover or contribute to the cost of any emergency childcare. If the nurseries do not have any space, there is also an NHS childminding co-ordinator for Leicester that employees can contact.

• †For more information on childcare visit: employeebenefits.co.uk/benefits/childcare