Punching In: Sky-High Child Care Costs Create Employee Burden

Monday morning musings for workplace watchers.

The Price of Child Care|OFCCP List Questions

Rebecca Rainey: Childcare costs more than rent in some parts of the country, newly updated data from the US Labor Department found, shedding light on just how large of a financial burden parents will face when the beefed up child tax credit expires next year.

Parents spend between 8.9% and 16% of the median income for most families in the US on child care each year, according to new data from DOL’s National Database of Childcare Prices. In 2022, the latest year dollar-amount data was available, that cost ranged from $6,552 to $15,600 per year. The agency notes that the median annual cost of rent was $15,216 in 2022.

The cheapest type of full-day child care is home-based preschool care in certain small counties, the DOL’s analysis found, while infant center care in larger, more urban counties was the costliest. The cost tracker launched by the Biden administration in 2023, was recently updated to include information from 48 states, the District of Columbia, and Puerto Rico from 2019 through 2022.

“The fact that the median cost of center-based infant care is more than the median cost of rent should be of urgent concern,” Women’s Bureau Director Wendy Chun-Hoon said in a statement on the updated data. “Families are struggling and women are disproportionately impacted.”

The realities of how high childcare expenses are comes as Congress will be considering potential revisions to the tax code to continue increased tax relief for parents and to support businesses providing paid leave and child care benefits.

The 2017 Tax Cuts and Jobs Act, passed during the first Trump administration, increased the maximum child tax credit individuals can take from $1,000 per child to $2,000 per child and expanded eligibility.

Lawmakers will consider whether to extend those benefits next year before a number of the tax incentives included in the TCJA expire. Democrats and Republicans are also floating proposals to raise existing tax incentives for employers that provide paid parental and medical leave and child care benefits to workers.

If not brought under control, high child care costs can force workers into difficult decisions about where they live and whether they can afford to work at all, said Suzanne Kahn, vice president of the Roosevelt Institute think tank.

Parents can’t just go anywhere for a job, “partially because they’re relying on networks and families and friends to help cover care in an affordable way,” she said. Parents are also less mobile within their own jobs and career paths, she added, “because especially women, tend to take steps back from the workforce and aren’t able to necessarily take a promotion” if it means more hours.

That narrows the labor market options for employers and means less economic activity, added Elise Gould, a senior economist at the Economic Policy Institute.

“If employers want to attract and retain the workers that they want, offering those kind of benefits can be advantageous to not only attract those employees, but also to keep them to reduce turnover,” she said.

Advocates speak during a press conference on Universal Child Care on November 19, 2024 in New York City. Data newly released by the US Department of Labor shows that the expense of child care has skyrocketed across the country, adding a major expense to employees’ personal budgets.

Photographer: Michael M. Santiago/Getty Images

Rebecca Klar: Employment attorneys have been raising questions about the Department of Labor federal contractor watchdog’s newest list of companies it plans to audit.

The Office of Federal Contract Compliance Programs released its latest corporate scheduling announcement letter list in late November, listing more than 2,000 compliance evaluations for federal contractors and subcontractors.

The list serves as a courtesy notification to companies that are chosen neutrally from a pool of eligible contracts valued at $50,000 or more for an audit of their compliance with equal employment opportunity laws.

The list is meant to exclude any companies over a handful of factors, such as being currently under review, currently under a monitoring period after a conciliation agreement, or within the exemption period following a closed review.

But there were dozens of companies on the list that should not have been based on the exclusions in the methodology, said Alisa Horvitz, an attorney at Roffman Horvitz PLC, who focuses on the OFCCP.

Firms that believe they are incorrectly added can email the OFCCP to notify them, the agency said in its statement announcing the new list.

The OFCCP declined to comment further on the list and on potential problems that attorneys cited with it.

The list was also four times the size of the agency’s two other most recent scheduling announcement lists, which were released in June and January 2023, respectively.

Consuela Pinto, a former DOL attorney and current partner at Pinto Brown PLLC focusing on employment law and OFCCP reviews, said she has never seen the OFCCP release a scheduling list so large.

There are always some minor errors on the list, several labor attorneys said. Pinto said it’s not clear if there are more this time around because the list is larger than what the agency typically puts out—or if the list wasn’t completely vetted.

David Fortney, co-founder of employment law firm Fortney Scott, said the timing of the release “appears to be a very conscious response” to the recent general election.

“There’s a growing number of last-minute efforts by the agencies to either dictate the agenda for the incoming administration, or encumber resources, or somehow slow it down or to do something to prevent the change that is inevitable whenever you have an administration change,” said Fortney.

That trend is apparent during any administration turnover, regardless of which party is leaving power, Fortney added.

The incoming administration, is capable of getting rid of the list on day one, or as soon as a replacement OFCCP director is in place.

Bloomberg Law affiliate Bloomberg LP in New York appeared on the most recent audit list.

We’re punching out. Daily Labor Report subscribers please check in for updates during the week, and feel free to reach out to us.