An employee's productivity levels and performance at work are hugely impacted by their life outside of work. And more often than not, that life includes family life. According to Compt’s 2024 Benchmarking Study, the Family stipend category was the third most popular category by money spent.
Whether your team has young children, family members in need of care, are trying to grow their family, or are in any other countless unique family settings, your employees are constantly trying to balance the challenges and stresses from home with work.
Truly great, people-focused companies understand this work-family-life conflict and do their best to take care of employees’ families in some way.
While offering individual family benefits is a good approach, such as some dedicated programs for adoption or fertility, what about employees who don't have a need for that? A more powerful and inclusive way to support all of your employees' various out-of-state-care-stipends family needs is through a family stipend. With a flexible family stipend, more of your employees can gain valuable peace of mind in their family lives so they can stay present, productive, and engaged at work.
Here's what is covered in this guide:
First, a definition:
A family stipend, or family allowance, is a sum of money given to employees in addition to regular wages to help them pay for family-related expenses.
When you offer your employees a family stipend, you not only communicate that you recognize the common challenges of family life, but you also "walk the walk" by taking positive action toward making things better for your employees and their families. A family stipend can do wonders for your employees' sense of appreciation and belonging at your company as well as lower their stress levels and risk for employee burnout.
The categories that a family stipend covers can include:
Here are several major benefits of offering family stipends to your employees:
What you offer (and don't offer) your employees is representative of who you are as an employer. That means that by offering a family stipend, which supports your employees in an area of their lives that typically doesn't get a ton of special attention, you show how much you really care about them and their whole lives. This, in turn, helps employees see the value of an employer who genuinely cares.
A family stipend has practical benefits for your company as well. A family stipend can help reduce the potential home-related distractions your employees are experiencing - particularly as so much work is being done at home these days - so that they can perform better at work. They'll also be less likely to need time off to take care of family things and also less likely to leave to work at another company that's more accommodating to their family lives.
Ask any of your employees who is also a parent or caregiver, or who is struggling to grow their family, and they'll tell you that it's exhausting. Offering a flexible family stipend that can alleviate the pressures that relate to family life can make a huge difference in your employee wellness and the likelihood of employee burnout. This has a positive ripple effect on your entire organization in more ways than we could even think to measure!
Everyone in talent or people ops knows this very well, but it needs to be said: finding and keeping great talent is a constant challenge. Offering a family stipend is a powerful differentiator for companies who DO offer it because it sets you apart significantly from other companies who don't offer it or who only offer one-off family benefits that only serve some of their employees but not others.
According to the Pew Research Center, non-traditional family structures are more common than ever, taking forms such as:
Offering a family stipend allows you to offer support to employees that is typically unavailable via traditional benefits plans.
If you're interested in exploring family stipends for your company, talk to a Compt stipend expert who can walk you through what's possible.
Following the U.S. Supreme Court’s overturning of Roe vs. Wade, some employers are offering to pay for travel expenses if employees must leave their own state for care to have an abortion. Without coverage for abortion under Medicaid, families must pay out-of-pocket for the procedure. Some states prohibit insured plans from providing benefits for abortion procedures.
KFF.org, Abortion in the U.S. Dashboard
Companies with fully insured plans can set up a separate self-insured program to provide employees with travel benefits. For example, Dick’s Sporting Goods offers up to $4,000 in travel expense reimbursement to employees, spouses, or dependents enrolled in their medical plan, along with one support person. Similarly, Starbucks provides a medical travel reimbursement benefit so employees can receive fertility treatments such as IVF and abortion procedures.
Out-of-state care stipends can cover:
Below are some key areas a family stipend can benefit your employees:
For parents of younger children, childcare costs take up a significant portion of many employees' expenses on a monthly basis. And while the split is different for every company, both parents are employed in 63% of American families with children. Covering all sorts of different childcare options with a flexible family stipend gives equal support to both mothers and fathers on your team, by covering expenses for things like a nanny, a nightly babysitter, daycare, backup care, and overnight sleep consultant, just to name a few.
Children are not the only family members who need care. In fact, the number of Americans ages 65 and older will more than double over the next 40 years, reaching 80 million in 2040 and a great many of those people are family members who want or require support. Offering your employees a family stipend that can also cover this type of expense is not only forward-thinking but so valuable for employees with aging family members who need their care.
Your employees have sick leave and short-term disability when they themselves are doing through illness or injury, but that's not the only time they'll be impacted by illness or injury. When someone in their family is going through a rough patch health-wise, whether it's one of their dependents or someone else for whom they offer financial support, your employee might very well be impacted. A family stipend is flexible enough so that you can help your employees in such a time of need, should it arise.
For couples who want to expand their family and are running into challenges for one reason or another, fertility treatments present new hope and many different avenues to pursue - but it comes with a price. While you can offer specific fertility benefits from a vendor or service, offering a family stipend allows you to include this particular need AND the many other potential family expenses on this list, with one benefit.
Adoption and surrogacy are two a very unique needs and experiences, but that doesn't diminish their importance in an employee's family life if that's what they're going through. A family stipend lets your organization honor these two very powerful and personal (and expensive!) journeys with equal attention as you might give to other more common types of family expenses.
If you ask most people who own a pet (or several!), they'll likely tell you that their pet is a family member. Offering a flexible family stipend allows you to tell your employee pet owners that you consider their pets as family, too! Unless you work at a pet-focused company like Chewy or Petco, it's not often that employee benefits include coverage for pets; this is your easy and effective way to do that, making those employees feel heard and appreciated.
Employers can offer stipends as a way to support bereavement policies for employees who have lost a loved one. The stipend can be a fixed amount of money given to the employee to help cover expenses such as funeral costs, travel, counseling services, and more. Above all, employers need to be flexible and understanding during this difficult time for the employee, as it can have a significant impact on their mental and emotional well-being.
Things that aren't covered by employee fertility benefits:
2. Acupuncture, herbal treatments, nutrition counseling, general genetic tests, travel costs, physical therapy, or fitness-related expenses.
3. Expenses that are covered or reimbursable by any third party (individual or entity) or any other plan or program, including but not limited to, employer-sponsored medical or other benefit plans, or a governmental plan or program.
4. Medical expenses of eligible employees, spouses, domestic partners, or covered family members (regardless of whether such expenses are covered by, or reimbursable under, any employer or governmental plan or program or by a third party.
The list of companies offering family stipends is ever-growing, but here are a handful that stand out as great examples:
Pinterest offers adoption support, paid parental leave, and egg freezing as family benefits.
In January 2018, Walmart expanded its paid parental leave policy from two weeks' leave to a full six weeks of paid parental leave for full-time hourly and salaried associates.
Ranking number 2 for best places to work in 2022 on Glassdoor, HubSpot offers egg-freezing and generous paid parental leave.
Adobe offers backup care with up to 100 hours of care for children and adults or elders. Stipends can be used for an emergency sitter, backup care in-home or at a center, or help at home if you need it after an injury.
The large banking company offers a childcare stipend of $75 to $100 per day to offset childcare costs for children up to age 12. The company also offers a stipend for the care of special needs children up to age 21.
Among its many employee benefits, tech giant Facebook offers coverage for its employees' fertility treatment costs up to $100,000 (includes four cycles plus PGS).
In December 2018, Best Buy announced a backup childcare benefit to working parents whose regular childcare arrangements were not available. Employees can use up to 10 backup childcare days per year and only need to pay a $10 copay for the benefit. Subsidized backup childcare is available when school or daycare closes for the day, a regular caregiver is sick or on vacation, or an unexpected gap occurs in regular childcare arrangements.
The 15,000-employee hospital allowed parents who could complete their work from home to do so. For those whose duties required regular interaction with patients, Cedars-Sinai offered a $100 per day childcare stipend. The hospital also chose to retain employees when the freeze on non-essential medical care started rather than placing them on furlough to ensure their financial stability.
This household company with a massive footprint and likewise massive employee base shows how much they care about family by offering fertility treatment coverage of up to $75,000
As the largest private-sector employer in America’s second-largest city, Kaiser-Permanente began offering a $300 per week childcare stipend to any of its 40,000 employees who needed it starting in April 2020. Employees can use the childcare stipend to pay for a childcare center, home daycare, friend, or relative to watch their children.
The nation’s largest group of retail coffee shops created a backup childcare benefit similar to Best Buy’s in October 2018. Starbucks made this move after accessing a National Children’s Health Survey that indicated two million parents quit their jobs in 2016 due to childcare issues. With benefit parameters similar to those of Best Buy, Starbucks employees can opt to pay $1 per hour for in-home childcare or $5 per day to a daycare center.