Can Providers Require Parents to Pay During This Crisis?

Family child care providers are closing across the country or losing many of their clients. As a result, their income has dropped significantly and they are hurting financially.

Can you charge parents if you close or if parents are keeping their child at home? Let’s look at these two situations:

1. Your child care program is shut down

In this situation, you are forced to shut down by the government or you do so voluntarily.

In general, you cannot charge parents to pay you while you are shut down.

• The only exception would be if your contract says parents must pay, even in cases of a public health emergency (or words to that effect).
• Your contract probably says that parents must pay even if they don’t bring their child to your care. However, once you are closed you are not able to fulfill your part of the contract, so you can’t expect parents to pay you.

What if your contract says parents must pay if you are closed for “emergencies” or “unforeseen circumstances” or “when local schools are closed”, or other? This may not be strong enough language and I recommend you change it to say "public health emergency".

What can you do to get paid?

You can always change your contract to require parents to pay you if you are closed because of a pandemic such as the coronavirus. As long as parents sign the new contract, you can enforce it. If they don’t sign it, you can’t.

I have heard in one state the Governor say that providers could not charge parents if they are closed. I don’t think this applies to situations where parents sign a new contract saying they will pay.

How can you get parents to sign a contract if they are at home?

• You can send them a text with the new language and ask them to reply to the text indicating that they agree to the new language.
• You can email the parents with the contract attached and ask them to sign and return it via email or regular mail.
• You can mail them a signed contract and ask them to mail it back (old school!).

Here's an example of what your new contract might say:

”I have had to close down my program temporarily because of a public health emergency. This could also happen in the future if I am forced to shut down by a government agency, or because I believe it is in the best interest of my families to do so to protect everyone during a public health emergency.”

You should also include the terms of payment. Here are some options to choose from. You can also create your own options.

• “If you have paid in advance, I will A: refund the money. B: refund half the money. C: not refund the money and continue to charge my normal rate. D: apply the money to care once I reopen.
• If you have not paid in advance, I will A: charge my normal rate. B: charge half my normal rate. C: Offer a 25% discount. D: not charge parents during my closure.”

As you can see, you are free to adopt any contract language you want. If a parent does not want to agree to your new contract language, and they have paid you in advance, you must refund their money. You also can ask parents to donate the money to you.

2. A parent keeps her child at home while you are open

When a parent voluntarily keeps their child at home, while you are open, you can enforce your contract language that says they must pay even if they don’t show up. Look to what your contract says.

In light of this national crisis, you can change your contract. Here are some options to choose from. You can also create your own options.

“During this national health emergency, I will be keeping my child care program open as long as possible. If I am open and you decide to keep your child away from my program, I will A: charge you my normal rate. B: charge you half my normal rate. C. offer a 25% discount off my normal rate. D. not charge you. If you have concerns about this new policy, please talk with me.”

Again, you can establish your own rules. If you do make a change, parents must sign the contract for it to be enforceable. Many providers have told me that at least some of their parents are paying them while keeping their child at home.

If a parent is unwilling to sign your new contract, have a discussion about whether they plan to come back when the pandemic is over or if they are permanently terminating care. If they are terminating care, they should follow your normal termination rule about giving you proper notice. However, if you are not open for the full notice period, you can’t charge them for the days you are closed. If you are open, you can relax your rules and not enforce the notice period if you want.

Subsidized parents

Some states are temporarily paying for subsidized children even when providers are not open. Some states don’t allow providers to charge the parent copay unless the provider is open and the child is attending. If you are going to change your contract and require subsidized families to pay you, check with your subsidy program first to see if this is allowed.

You can negotiate

You are free to negotiate changes in your contract and offer different options for different parents. You don’t have to offer the same deal to all parents such as single parents or essential workers.

I recommend you establish your new rules and communicate this to all parents. Then, if one or more parent object, you can negotiate.

• If you are going to require parents to pay 50% of your rate while you are closed or while parents keep their child at home, you can allow one parent to pay you 10% or nothing.
• You can have parents pay you later when they get their job back.
• You can offer discounts to single parents, parents on unemployment, parents with two children in your program, parents who are essential workers, and so on.

You can’t discriminate based on race, sex, religion, national origin, ethnic background or disability. In some states you also can’t discriminate based on sexual orientation, marital status or other classes.

For parents who won’t sign your new contract, you can require them to pay a holding fee to hold their spot until you reopen. Your holding fee can be whatever you want, as long as it’s not more than your regular fee. If a parent doesn’t want to pay your holding fee, you can refuse to provide care when you reopen or you can choose not enforce your holding fee and accept them back when you reopen.

Tough times

These are very difficult financial times for everyone. Some parents don’t want to pay for child care if you aren’t open or if they want to keep their child at home because of legitimate health concerns. You don’t want to lose income and may be suffering terribly because you are closed or operating at a very low level.

As a family child care provider, you are in a caring profession and want to support the families in your care. However, you also need to care for your own family. You shouldn’t feel ashamed to ask for money even when the child is not in your care for whatever reason. Some parents may pay, some may not want to. It’s okay to ask for money even if you don’t intend to try to collect from them if they don’t respond.

There are new federal and (some state) laws that offer financial resources in the form of unemployment benefits and grants and loans. I’ll be writing about this in the next few days.

Tom Copeland - www.tomcopelandblog.com

Image credit: https://www.hanscom.af.mil/News/Article-Display/Article/381361/melissa-roth-honored-as-afmc-family-child-care-provider-of-the-year/