Employers rethink childcare policy as WGEA obligations loom

With more than one in three working parents considering leaving their job in the next 12 months due to difficulty managing work and caring responsibilities, organisations are turning to alternative methods to retain staff and remain compliant to gender equality objectives.

According to recent Workplace Gender Equality Agency (WGEA) data, approximately 4 per cent of Australian workplaces currently offer employer-supported childcare.

Despite increased rates of flexible work benefits across Australian workplaces, working parents continue to struggle with gaps in childcare-centric policy. While more fathers are taking on caring responsibilities, they continue to face difficulty accessing flexible work – something that is currently being addressed as part of the Paid Parental Leave Amendment Act.

In addition, the “motherhood penalty” – the systemic disadvantages working mothers often face in the workplace, including bias and weakened career development – continues to burden working women as the primary driver of the continued gender pay gap in Australia.

As part of the 2025–26 WGEA findings, large employers (500-plus employees) are under new obligations as part of a world-first initiative. Instead of simply reporting the actions organisations were taking to improve gender equality, compliance will now be tied to 2029 outcomes, with businesses having to select three targets from a preset menu of nine numeric and 10 action targets, in a 1+2 rule as outlined in new legislation.

Included are numeric achievements, such as promotion/hiring targets and increasing gender balance on governing bodies and within the larger workforce, while the implementation of two or more specific childcare support measures, the formalisation of four or more specific flexible work options, and implementation of new reporting and safety mechanisms concerning sexual assault make up some of the action targets.

For numeric targets, organisations do not necessarily have to hit the specific number to be compliant but must show demonstrated improvement in that area. However, action targets are judged as “all or nothing”. In addition, any already implemented action targets cannot be newly selected as part of the new obligations.

One such improvement within the action target category that addresses a significant gap in childcare-centric policy is the improvement of facilities or support for employees with carer responsibilities. To pass this target by 2029, the implementation of at least two measures from a select list must be demonstrated.

This includes employer subsidies childcare, onsite childcare, priority at care centres, breastfeeding facilities, and internal, formal support networks.

And with childcare disruption costing employers in absenteeism, lost productivity, and attrition, the benefits of these measures are mutual. The issue with current childcare options, childcare platform Kiddo outlined, was the lack of flexibility care centres offer and the lack of backup option should a child or nanny be sick.

For Rebecca Dredge, a mother who returned to her banking career following the birth of her child, flexible work didn’t make as much impact without flexible childcare. The answer was a platform that provided on-demand childcare as a workplace benefit, which, Kiddo outlined, should be incorporated into workplace policy.

Dredge explained: “Employers offer flexibility, but the childcare system often can’t support it. When care falls through, flexibility disappears.”

She also highlighted the problem for organisations: “What we hear consistently from HR teams is that they assumed childcare was the employee’s problem to solve. But when childcare breaks down, it becomes an employer problem very quickly – through absenteeism, reduced output or losing good people.

“Centre-based care works well for predictable schedules. It doesn’t work well for a parent who needs cover at 6pm because a client meeting ran late, or who has a school closure day with no warning.”

Through its Corporate Care program, Kiddo works with employers to provide on-demand childcare as a workplace benefit, covering the gaps that standard care arrangements cannot. BigLaw firms McCullough Robertson and Clayton Utz, pathology company Healius, Gameloft Business Solutions, and Brisbane Economic Development Agency have all implemented this program.

McCullough Robertson chief people officer Louise Ferris explained how the program fixes a gap the firm’s existing flexible work policies couldn’t close and addresses the “real stress and disruption” these gaps caused.

Dredge concluded that childcare is one of the most tangible actions employers can take to support gender equality and stated: “It’s practical, measurable and makes an immediate difference to the people most likely to be held back by it.”

The WGEA portal opens on 1 April this year – between then and 31 May, CEOs must sign off on which three targets their company will be committing to. Failure to meet these new targets can be a reputational and commercial risk, and a lack of improvement by 2029 could mean an organisation faces being labelled non-compliant and potentially barred from Commonwealth government contracts.

As Dredge surmised: “Closing the gender pay gap starts with closing the childcare gap. The WGEA changes are influencing not just those employers impacted, but all businesses.”