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HR Support on Dependent Care Benefit & Deductions
Editor's Note: Offering dependent care benefits and/or support, may improve the bottom line.
Overview: An employer's approach to work/life balance can have a significant impact on their recruitment and retention strategies, how they are viewed in the marketplace and can even affect their bottom line.
Many employers offer voluntary dependent care benefits designed to help employees balance the demands of work and family. While the types of benefits offered in employee benefit programs may vary based on the employer, some of the more common types of dependent care benefits include: on-site childcare; childcare subsidies; backup childcare service; paid and/or unpaid leave; alternative work schedules; dependent care flexible spending accounts; and permission to bring a child to work in an emergency.
Dependent care benefits make it possible for many employees to work. Employers often offer these programs in an effort to demonstrate their commitment to employees, reduce absenteeism and increase productivity and morale.
Trends: Complaints against employers for unequal treatment based on caregiver status (also known as family responsibility discrimination or FRD) are on the rise. Many employers are taking a good hard look at their dependent care practices to ensure equal treatment for all forms of caregiving.
Tracy Morley, SPHR, Legal Editor
Latest items in Dependent Care Benefits
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Taxation of Employee Benefits
Employee benefits, such as health insurance, sick pay, disability pay, workers' compensation insurance and retirement savings plans, may be subject to withholding for federal income taxes (FIT), Social Security and Medicare (FICA) taxes or federal unemployment (FUTA) taxes. This section assists HR professionals in understanding how each particular type of benefit plan must be structured and how to properly tax and report contributions, reimbursements and distributions in order to ensure compliance with the Internal Revenue Code.
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New Section Added on Maine Taxation of Employee Benefits
XpertHR has added a new section to the Employment Law Manual explaining whether employers in Maine must withhold payroll taxes on health insurance benefits provided to employees' same-sex spouses.
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Taxation of Employee Compensation
Employees' salary and fringe benefits are subject to federal income taxes, Social Security and Medicare taxes, and federal unemployment insurance tax. However, certain cash and noncash fringe benefits may be offered to employees on a tax-free basis, while an otherwise tax-free fringe benefit becomes taxable compensation to employees if employers do not meet the rules for that particular fringe benefit .This section assists HR professionals in determining which fringe benefits (e.g., company car, health benefits) and other compensation (e.g., bonuses, awards) are taxable or not.
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Managing Employees in Special Situations
In-depth review of the spectrum of Federal employment law requirements HR must follow with respect to Managing Employees in Special Situations
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Are dependents covered under HIPAA?
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Other Benefits and Services
Employers should consider providing benefits that offer convenience and cost savings to employees even if they are not legally required to do so, as they can increase retention and improve recruitment. This section provides an overview of popular benefits, including commuter/transportation benefits, dependent care benefits, tuition assistance, employee assistance programs, discounted insurance benefits and severance benefits.
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Total Rewards
Attracting, motivating and retaining talent is critical to an employer's short- and long- term success. This section assists HR professionals in implementing a comprehensive, integrated total rewards strategy that can help achieve those important objectives.
About this topic
HR guidance on the value of providing dependent care benefits.