Employers that provide family-friendly flexible working arrangements should be allowed to pay less PRSI, according to a pre-Budget submission on childcare from Dublin Chamber of Commerce.

In a letter delivered to the Minister for Finance, Brian Cowen, last week, the Chamber proposes that companies should be "incentivised and rewarded" for providing staff with flexibility.

The chamber's chief executive, Gina Quin, points out in the letter that while some companies currently offer "flexi-time" arrangements, this varies from workplace to workplace. "We believe that if more companies entered into such arrangements, the pressures on working parents would be reduced," she notes.

The Chamber recommends that companies offering flexible hours should qualify for a "significant reduction in PRSI for the employee" who uses the option. Employers currently pay PRSI for their staff at a rate of 10.75 per cent.

The relief would come, the Chamber suggests, where companies reduce weekly working hours to a maximum of 30 hours. It would apply up to a child's entry to primary school and would be an alternative to parental leave.

Ms Quin argues that a more coherent childcare policy must be achieved without increasing company costs and undermining competitiveness.