We all know that there is an acute shortage of retail workers.  But you may not have thought about the fact that there’s a correlation between this crisis and the lack of affordable childcare in the U.S.  Over 50% of store employees are women, and if those with young kids can’t find someone to take good care of them, they can’t work.  The same is of course true of fathers.

Federal grants for childcare put in place during the pandemic have recently expired, potentially leading to the closure of thousands of care centers. There is a also great shortage of workers in the childcare industry, in part because many of these positions offer low wages and no benefits. 

As employers, we need to lobby for state support of programs that will help solve this crisis. We can also consider offering our staff members a dependent-care flexible spending account, or FSA. This program allows households to set aside up to $5,000 in pretax income to be used for either childcare or eldercare. According to Business.com, “employees with a dependent care FSA have a pre-tax percentage of their wages automatically deducted from each paycheck. The DCSFA annual maximum contribution limits are $5,000 per household, or $2,500 if married filing separately.” 

A Dependent Care FSA (DCFSA) can be used to pay for childcare or adult dependent care expenses that are necessary to allow an individual to work or look for work. While money put into a FSA is not taxable, it must be used for certain purposes within the calendar year. Dependents must qualify under certain stipulations for age and relationship. See FSA Feds, a government website, for more information.

Setting up a DCFSA for your employees does not cost your business anything unless you decide to match contributions, however administering these accounts may be burdensome unless you have several employees wanting to take advantage of this program. If you think a DCFSA will help you draw more job applicants, and be appreciated by your existing staff members, talk to your payroll company about offering the DCFSA option.

Happy Retailing,
Carol “Orange” Schroeder