Recognizing the Business Sense of Day Care : IRS and 4 County Firms Are Honored for Helping Working Parents

It starts with a midnight cough from the baby’s room. By morning, the cheeks are flushed, the pediatrician has been called and another workday has been shot--along with plans and deadlines--in order to care for the sick child.

But if you happen to work for Pacific Mutual Life Insurance Co., you have some recourse to lost work time, because the Newport Beach firm has six years of commitment to helping employees provide care for their ill--and well--children.

Pacific Mutual contracts with a nearby center called Rainbow Retreat, which specializes in day care for mildly ill children, and pays 10% of the center’s $5-an-hour fee. The firm also helps the parents it employs to foot the bill for regular child care.

While the issue of business and child care has been catapulted into the legislative spotlight by everyone from conservative Sen. Orrin Hatch (R-Utah) to liberal U.S. Rep. Patricia Schroeder (D-Colo.), very few businesses nationwide actually are working to ease the child care crunch of the 1980s.

Pacific Mutual was one of five Orange County employers honored Friday at a business breakfast sponsored by public television station KOCE of Huntington Beach and a host of local child care providers, businesses and legislators.

The ceremony was designed to highlight child care concerns in Orange County and discuss the intertwined issues of doing business and caring for families. In addition, Fairview Developmental Center, the Internal Revenue Service’s south county office, the Santa Margarita Co. and the Irvine Co. were honored Friday for their efforts to address the area’s pressing child care needs.

Child care services offered in Orange County are drastically deficient, according to the Children’s Home Society of California. For the 137,000 Orange County children 3 to 5 years old, there are only 36,291 licensed child care spaces here. Only 3,636 spaces are available for the 66,400 children under the age of 2. In the next 10 years, the County Administrative Office predicts that this local need will increase 17%.

The statistics are grim and the solutions are hard to come by. But as more children are born to two-income families, the realization is growing nationwide that America’s companies must come to the aid of their employees with children.

“We have for decades had a corporate culture that says to keep your problems at home,” said Dana E. Friedman, senior research associate for the Conference Board and vice president of the Child Care Action Campaign, a national advocacy group. “That’s fine when women were at home. But now neither men nor women have wives at home taking care of these concerns.”

Pacific Mutual saw this crunch coming and decided in 1980 to do something about it. Two years later, a company voucher and discount program was in place offering direct child care subsidies.

As a result, Pacific Mutual parents end up paying for only 80% of their child care costs. The company contracts with three local day-care centers, which offer Pacific Mutual employees a 10% discount. The company gives parents a voucher that covers an additional 10% of their day-care costs.

Company officials contend that their program more than pays for itself. What Pacific Mutual gets for its estimated $20,000 annual child care investment is a higher caliber employee, increased loyalty and decreased absenteeism.

“The issue is what other lights and whistles can employers put out there to entice good quality employees to the company and retain them,” said Geno Effler, a Pacific Mutual spokesman. “If you can say you offer a benefit that few other companies do, it’s helpful.”

Pacific Mutual is nearly alone in its efforts--both nationally and countywide. Orange County statistics have not been compiled, but the Conference Board estimates that slightly more than 3,000 of the nation’s 1.5 million companies with more than 10 employees provide some form of child care support.

Of that number, between 30 and 40 offer direct subsidies such as Pacific Mutual’s; 750 offer on-site child care centers; 800 offer referral services, and 1,500 offer child care as an option in employee benefit plans.

Those that do not offer child care support of some kind cite expense, lack of employee interest and liability, Friedman said.

Those five companies honored Friday were able to overcome those obstacles. Although they are not the only companies involved in child care support for their workers, they are among the more innovative and dedicated in the county, said Jo Cains, KOCE director of community relations.

Fairview runs Orange County’s oldest on-site child care facility for employees’ children ranging in age from 6 weeks to 5 years. The center opened in June, 1983, after an employee committee convinced Fairview officials of the need for quality child care.

“It came about as a result of interest on the part of employees who were concerned about the lack of availability of child care resources in Orange County,” said Hugh Kohler. “It has really reaped a lot of benefits for us. . . . It’s a recruitment incentive.”

The center cares for 95 children and opens at 6 a.m. While most of the charges are employees’ offspring, the center is open to all state employees and the community. Fairview provides the site, and tuition takes care of operating expenses.

The IRS will open its own on-site day care center in the Ziggaurat building in Laguna Niguel. The center, which is scheduled to open in June, will have a capacity of 100 children from 8 weeks of age to about 5 years.

The center will be the second opened by the agency in the country; it is part of a network of on-site centers planned by the IRS over the next several years. Enrollment at the Ziggaurat Child Development Center will be open to all local federal employees and to the community.

Dana Friedman of the Conference Board called the national IRS effort “a major step.” The agency, she said, “is one of the only employers in the country with multiple sites that has chosen to build multiple centers.”

The other two companies honored were developers of planned communities--the Irvine Co. and the Santa Margarita Co.--that have made substantial efforts to incorporate child care facilities into their real estate developments.

Their reasoning: Child care is a worthy cause and providing it is a savvy business move.

Three day care centers are in the works in the master-planned development of Rancho Santa Margarita. Two of those centers will be in residential areas; the third will be in a proposed business park.

“In the early 1980s when we were planning our community, we identified child care to be a large priority of our home buyers, because we anticipated that the bulk of our home buyers would be young first-time buyers, two-income couples,” said Diane Gaynor, a Santa Margarita Co. spokeswoman. “We’re providing a place where families can live and work and play.”

The Irvine Co. began its support of local child care in 1984 with a $25,000 grant for one center’s start-up costs.

“From that initial exposure, the planners here began to recognize how important child care would be in the building of a new community in Irvine,” said Thomas Stephenson, director of corporate affairs.

In 1985, a joint powers authority called the Irvine Child Care Project was formed to provide for basic child care needs in the planned community. The Irvine Co. gave the project a $250,000, three-year grant for the building of five child care centers.

The company’s most recent foray into the child care arena is a $5.5-million construction bond issue that will allow the child care project to expand, Stephenson said. Tuition should be able to pay back the debt, but “the Irvine Co. is the ultimate guarantor.”

“We expect that with the services offered, these centers will flourish, and they themselves will pay back the bonds that purchased these facilities,” Stephenson said. “We look at the Irvine child care project as a model for the nation. That’s one of the reasons we were willing to step forward with the loan guarantee.”