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Work and family benefits come of age: an overview of public- and private-sector programs.

Although no definitive studies inventory all the employer-provided work and family benefits in the public and private sectors, employers in both realms are actively developing a wide range of initiatives. These initiatives include: parental and family leave, dependent care assistance plans, resource and referral, and child care centers, among others. The initiatives are driven by the need to be competitive with other employers in maintaining a quality work force, regardless of what the service or product may be. Increasingly, employers are demonstrating that carefully designed work and family benefits and policies more than pay for themselves. For example, the Los Angeles Department of Power and Light reduced absenteeism by 25 percent upon instituting a work and family program. Further, the turnover rate of employees who use the program is 2 percent compared with a 7 percent rate of nonusers.

Types of Programs

Employer-sponsored work and family programs address four areas of need for employees: flexibility and time off, information, financially related benefits and direct services.

Flexibility. Approximately one-half of all employees have dependents--children, aging parents, disabled spouses--or other responsibilities requiring their attention during the work day. Employers are recognizing that these employees can better fulfill their work responsibilities if they are able to arrange their schedules or take time off when they need it. Perhaps the employee personal-life need addressed most often by public-sector employers is time off and flexibility.

New York State offers management employees atypical work arrangements that include variations of flex time, compressed work week (same number of hours per week within fewer days), job sharing and part-time work. Flexible scheduling, with details worked out by employees, their supervisors and entire office staffs, is available in some public entities, as well. State and federal laws may apply to flexible work arrangements, particularly when employees are covered by collective bargaining agreements. The compressed work week, for example, can be construed to involve overtime, thereby requiring overtime pay. As state laws vary on the treatment of these arrangements and the process by which they can be agreed upon, employers should consult their attorneys before making such changes in work scheduling.

At the 1992 GFOA annual conference, a roundtable discussion highlighted some of the creative approaches used in government offices to afford employees time for personal needs. To recruit high-quality police officers and computer programmers, the City of Beverly Hills, California, instituted "4-10," a program to schedule work over four 10-hour days rather than the traditional work week of five 8-hour days. The Beverly Hills program has been effective in achieving its objectives. On the other hand, the County of Los Angeles' initial compressed work week plan, instituted to reduce employee-commuting and thereby lower pollution, had been cumbersome. The employees' schedules varied to such a degree that meetings with groups of employees were difficult to arrange. The public suffered, as well: an employee handling a specific transaction on one day might be off the next day. On July 24, 1992, the county instituted "9-80," a schedule whereby virtually all employees work the same nine-day, 80-hour schedule. County offices, except essential services, close on alternate Fridays. The initial report is that the confusion of the former schedule has abated for employees and the public.

Telecommuting, whereby employees work out of their homes using computers to connect them to the office, is particularly attractive to public employers. In addition to reducing air pollution by limiting commuting, this arrangement has resulted in productivity increases of 30 percent to 60 percent in San Mateo County, California.(1)

The private sector has seen continued growth in the implementation of flexible work arrangements. A 1991 survey of 100 companies known to have progressive work and family policies and benefits showed that more than eight in 10 of these firms offered employees part-time work or flex-time. Another 1991 survey of large and mid-size employers in the general employer population found that approximately 40 percent offer these scheduling options. Work at home, while offered by nearly half of the progressive employers, was offered by less than one in 10 of the general employer population. Exhibit 1 presents selected data from these surveys.
Exhibit 1
 Progressive General
 Employers(*) Employers(**)
Part-time 86% 36%
Flex-Time 84 42
Job Sharing 55 17
Compressed Work Week 37 13
Work at Home 47 9
* Buck Consultants, 1991
** Hewitt Associates, 1991

Parental and family leave play a major role in flexibility. The Bureau of Labor Statistics (1992) reports that 53 percent of state and local government employees are eligible for parental leave, nearly all of which is unpaid. The typical employee is eligible for parental leave between six and nine months.

Twenty-six states, the District of Columbia and Dade County, Florida, have enacted leave of absence legislation for public- and private-sector employees for childbirth, adoption, care of newborns or care of ill relatives. The leaves range from 15 sick days for new fathers in Montana to six months in Florida and Pennsylvania (for public employees only). While these leaves are, for the most part, unpaid, the employee is usually guaranteed his or her job or job equivalent upon return. Most laws require that the employer continue the employee on the medical plan, with the employee paying the premium. Eligibility for leave, penalties to employers who violate the laws and other design features vary from state to state.

Many employers allow employees to "bank" unused sick time; Oregon and Georgia public employees, with some limitations, can apply paid sick or vacation leave to an unpaid leave of absence. An innovative approach taken by several government entities is to allow employees to donate their unused sick time to employees who need it.

Information. The information component of a work and family program--usually a resource and referral service--helps employees help themselves. Child and elder care resource and referral programs provide employees with counselors who can assist in locating specific care programs for their dependents. Many public employers, in addition to the 29 percent of medium-to-large corporations offer this service.

Most resource and referral agencies price the service on a per capita basis--from $7 to $20 per employee per year, depending on the number of employees, their ages and other demographics. Utilization tends to be low, about 4 percent, unless a good communications campaign is employed to help build usage. Other information services frequently provided by employers include on-site seminars or workshops. Typical topics are managing work and family, time management, stress management, selecting quality child or elder care and understanding human development. Forms of counseling that help employees cope with family needs are preretirement counseling, financial planning, employee assistance plans and wellness activities.

An informational program that more than pays for itself is prenatal care. A private-sector prenatal care program, in which pregnant employees are counseled about proper health practices during pregnancy and screened for high-risk of birth problems has resulted in lowering the average birth costs of employees from $27,000 to $3,000.

Financially-related Benefits. The most common form of financial assistance is a dependent care assistance plan funded through salary reduction. Employees may pay for qualifying child and/or elder care expenses with pretax dollars to a maximum of $5,000 annually. Flexible spending accounts, frequently called salary reduction accounts, have been implemented by approximately 40 percent of the states and half of large private-sector employers. The accounts are particularly attractive to employers because they result in FICA and other payroll tax reductions. Approximately 33 percent of state and local government employees are covered by these plans, and most states exclude the income for state tax purposes, as well.

Some employers subsidize lower-income employees' child care costs, some cover a portion of employees' costs of adoption and some provide contributions to employees' flexible spending accounts.

A type of financial support plan that is gaining ground is long-term care insurance that covers the employees' parents and parents-in-law, as well as the employee and his or her spouse. The benefit to the employees is the employer's research and group plan leverage, which can keep costs as low as possible. Few employers provide support other than making the benefit available, since contributions paid to fund this benefit are taxable. Similarly, group legal plans and discount mortgages enable employees to take advantage of lower group rates.

Employers, particularly in the public sector, are beginning to provide employees benefits for nontraditional dependents, referred to as "domestic partners," "spousal equivalents" or "significant others." They also can be grandchildren or adult children who are dependents of the employee. The benefits may be limited to paid sick and bereavement leave, as for employees of the cities of New York, Los Angeles and Minneapolis. Berkeley and Laguna Beach, California, offer medical coverage to employees' nontraditional dependents. Since few insurance carriers offer such coverage, these cities opted to self-insure in order to provide the benefit. In general, these benefits are not tax preferred; however, the determination depends on the tax status of the employee and individual covered.

Direct Services. Forty-three states offer employees on-site child care. The centers are most prevalent at state-owned universities and hospitals. Typically, the state helps establish the center as a not-for-profit corporation and provides the center with free rent and in-kind services.(2) Part of the impetus behind these initiatives is to present the state as a model for other employers.

There have been several initiatives aimed at expanding the supply of family day care, that is, child care in private homes, the most frequently used and least expensive form of care. The California Child Care Initiative Project, a consortium of public and private employers started in 1985, has resulted in considerable expansion of supervised child care in the state, with contributions of almost $5 million creating more than 3,000 licensed family day care homes.

Other child care services provided by employers include emergency, drop-in child care, usually located on-site, and special programs for employees' school-age children, which offer field trips during school vacations or summer camp programs developed through contracts with local community agencies.

Intergenerational care--care for children and elders together in one facility--is still very new as an employer benefit, but estimates indicate that the need will surge in the next few years.

Many other innovations are being made available to employees to meet newly identified needs, such as free beepers for expectant fathers, parent libraries and ready-made packaged dinners for employees to purchase at work. Many such programs are very low cost yet highly valued by employees.

Win-Win Solutions

Perhaps the most important step to be taken by an employer interested in work and family benefits is the commitment to the needs of employees with families. Employers treat this commitment as a business decision. Goals are set and a needs assessment conducted. When done properly, the needs assessment can identify "win-win" solutions: ideas that save money for the employer and provide important benefits for employees and the appropriate, cost effective programs can be implemented.


1 See Swerdlin, Marcy, "Worker Productivity is Improved by Letting People Stay at Home" in National Report on Work and Family, February 18, 1992, pp. 1-2.

2 See Taking Care: State Developments in Child Care, Washington, DC: National Governors' Association, 1990. (28 pp)

BARBARA ADOLF is manager of Work and Family Consulting Services with Buck Consultants, Inc., an international employee benefits consulting firm based in Secaucus, New Jersey.
COPYRIGHT 1992 Government Finance Officers Association
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Title Annotation:Pension and Benefit Report
Author:Adolf, Barbara
Publication:Government Finance Review
Date:Oct 1, 1992
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