How AB 1179 Will Improve Company Culture
On February 18, 2021, Assemblymember Wendy Carillo introduced Assembly Bill 1179 (AB 1179) to create a childcare safety net for employees working in California. If passed, AB 1179 will require large companies to provide their employees with backup childcare as a direct company benefit.
The bill comes on the heels of one of the most difficult years for working parents in California. As the Covid-19 pandemic spread through the United States, childcare centers across the country closed shop, leaving parents with fewer childcare options and new challenges at home.
Ultimately, the pandemic exposed longstanding inequities which have long been considered cultural norms in the workplace. Specifically, gaps in childcare have historically impacted working women more than men, particularly women of color. A troubling number of women end up exiting the workforce because of this.
AB 1179 seeks to eliminate childcare gaps by requiring employers to fund a backup plan. In doing so, AB 1179 will improve company culture by investing in both workplace equity and work-life balance.
To understand how this bill will improve company culture, however, it’s important to understand what AB 1179 does and how.
AB 1179 Makes Backup Childcare a Mandatory Benefit in California
AB 1179 would require companies with 1000 employees or more, state employers, and municipalities to provide 60 hours of backup care as a direct benefit to their employees. Under the law, employees must earn at least 1 hour of backup care for every 34 hours worked. Employees must receive at least 60 hours of accrued paid backup care by their 200th day of employment, each calendar year, or in every 12 month period.
Common situations requiring backup care include a sick child who can’t attend school or a nanny who cancels day-of. Situations like these often result in missed work when family or friends aren’t available to help. With a backup care benefit, employees will be able to pay for a backup babysitter or backup daycare to fill in when their regular care provider or child care center is unavailable.
AB 1179 Is Not the Only Childcare Law Out There
AB 1179 is unique, but it’s not the only family-friendly benefit law. Since the seventies, employers have been able to provide employees with tax-free money for childcare through Dependent Care Flexible Spending Accounts (DCFSA).
Certain state laws also require additional leave for family- and health-related reasons. For example, Washington requires up to 12 weeks of paid family leave and 12 weeks of paid medical leave.
So how is AB 1179 different? California’s bill is unique because it requires employers to pay for their employee’s emergency childcare through benefits packages. It’s not a tax break, nor is it leave. It’s money to help employees deal with unforeseen circumstances so that they don’t have to miss work.
How AB 1179’s Backup Childcare Benefit Will Improve Company Culture
Creating a strong organizational culture is a strategic goal for every company. Many successful companies already know that family-friendly benefits, like backup childcare, are integral to this strategy.
For example, California-based tech companies like Facebook, Apple, and Google have been providing backup childcare since well before the pandemic. For them, AB 1179 will have little impact on their benefits packages. Other large companies like Microsoft and Starbucks also provide backup childcare.
According to the Harvard Business Review (HBR), these companies have come to realize that benefits like emergency backup childcare “express an authentic desire to do well by your firm’s working parents” and “matter most for employee retention.”
Both study and practice shows that family-oriented companies are making important gains in company culture through childcare benefits. By mandating the backup childcare benefit, AB 1179 will bring other companies up to speed, improving workplace cultures for millions of California employees in real, measurable ways.
AB 1179 Will Optimize Talent Acquisition and Retention
Company culture is built by the people who work for you. In today’s tight market, more and more talent is looking for jobs that offer childcare benefits and assistance, even at the cost of higher salaries. In fact, a recent study found that about 80% of employees would take increased benefits over a salary raise.
Although the pandemic has made childcare benefits even more important for employees, they’ve always impacted talent acquisition and retention.
In 2013, the Human Capital Institute (HCI) found that family-oriented employee benefits, including backup childcare and paid parental leave, are important to attracting and retaining employees. The study also found that companies that offer the “most benefits and foster a supportive work-life culture” are most likely to see the following:
- Higher job satisfaction
- Increased employee engagement
- Less turnover
- Lower levels of stress among employees
The childcare benefits required by AB 1179 will foster a company culture that values working parents and attract talent seeking those benefits. As these studies show, employees receiving childcare benefits will be happier and less likely to leave. Companies will also save money on recruitment and eliminate other costs related to turnover.
AB 1179 Will Align Human Resource Strategy with Equity Strategy
A childcare study led by Dr. Alicia Sasser Modestino found that Covid-19 made work-life balance disproportionately more difficult for women, especially single mothers and women of color. According to the study:
- 26% of women who became unemployed during the pandemic left work because of childcare.
- 23% of Black women reported reduced hours because of childcare issues compared to only 15% of non-Black women.
- 22% of single mothers reported reduced hours because of childcare issues. Only 15% of married women reported the same.
Research shows that gaps between women, men, and women of color are not unique to the Covid-19 pandemic, they were simply exacerbated by it. In fact, the bill found that about one-third of highly educated women exit the labor market every year, 74% of which report it was because of inadequate childcare.
To improve company culture, companies must be able to execute an equity-driven human resource strategy. Helping employees stay at work by reducing conflicts between work and childcare will support this strategy. According to Dr. Sasser Modestino, one way to reduce this conflict is by increasing childcare benefits. AB 1179 will do this.