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Regulations Prove Problematic for Employer-Provided Childcare
By Tom Robertson
October 5, 1998
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One of the biggest obstacles in making the transition from welfare to work is the lack of adequate childcare, and Minnesota businesses are being encouraged to provide that service to their employees. But it's not as simple as it sounds, as one business in Blackduck has found.

IN 1994, RON ANDERSON, OWNER OF ANDERSON FABRICS in Blackduck, spent $300,000 to construct a state-of-the-art daycare facility for his more than 300 employees. He offered workers low-cost daycare and subsidized the center's operation to the tune of about $80,000 a year. The employees and the kids apparently loved it.

Anderson: We were in the daycare business for 11 years and never had any children get hurt or abused or anything else, and they were well taken care of. The kids were never upset. It's just state regulation that was frustrating for me.
Anderson's daycare repeatedly ran afoul of the rules and regulations governing daycare facilities. The center was repeatedly cited for health, safety, and licensing violations - offenses that Anderson considered petty.

Chief among those were staff-qualification violations. Anderson contends that because of his plant's rural location, he always struggled to keep the center staffed with qualified people. When daycare employees didn't show up, he'd pull women off the factory floor to fill in. That got him in trouble with the State Department of Human Services, which ordered him to stop the practice. So he did - by shutting the daycare down.

Anderson admits the closure was a shock to his employees. Diane Kolval is among the mothers who had to find alternative daycare, but she doesn't blame her employer.

Kolval: Actually, I feel the state was trying to hurt me. My understanding was there was a handful of people that would come forward with complaints, and the state pushed it way too far. I think it was really unfair and it hurt my family and a lot of other people around here. There were people that were forced to leave their jobs because of it. I know there was.
Anderson Fabrics employee Janine Weiser had to make other daycare arrangements for her two children, and she ended up paying more for that service. Weiser says some of the state's regulations don't necessarily work well in rural areas.
Weiser: We're in a small community and a lot of the regulations, I think, they were trying to force weren't that important in this area. I mean, if it was in the cities, it's different. But up here, everybody knows everybody, basically, and I think they were just being too harsh on some of the things. That didn't make a lot of sense.
Now, after being closed for a year, the Anderson Fabrics daycare center is open again, but this time Ron Anderson decided not to operate it himself. He contracted with a non-profit Community Action Program to run the center. Anderson provides free use of the facility, and it's a deal he says he's happy with.

The Anderson story seems to be heading for a happy ending. But the problem of finding and retaining qualified childcare providers is not limited to Blackduck. Jonette Zuercher of the Minnesota Childcare Resource and Referral Network says low unemployment in Minnesota, combined with generally low wages paid to childcare teachers and aids, means qualified providers are becoming scarce.

Zuercher: I think what we're seeing as far as a decline in childcare providers, where childcare providers literally cannot make it and actually are making more money working in fast-food restaurants. And I think that is just appalling, that we cannot figure out a way to pay childcare providers enough money.
Zuercher says many businesses are interested in providing childcare as a way to retain employees, but right now there are only about 45 Minnesota companies doing so. The number of smaller companies offering daycare is expected to grow, thanks to a change in state regulations that took effect in June. Department of Human Services Director of Licensing Jerry Kerber says the rules have eased up on small-business daycare operations.
Kerber: The Legislature, during the last session, did make some rather significant changes to the childcare licensing standards that relate to employers, in that employers who want to provide childcare, primarily for employees, and their intent is to remain under 14 or fewer children, they can do so according to the family-childcare standards, rather than childcare-center standards.
Childcare-center standards are more stringent and are enforced by the state, while family-childcare standards are much less restrictive and are monitored by counties. Kerber says the change will mean less costs and less regulation for businesses wanting to offer daycare to employees.