Questions and Answers About Early Childhood Contracts and Policies by Tom Copeland

We were honored to present a webinar by Tom Copeland on September 21, 2011, “Early Childhood Education Program Contracts & Policies 101: How to Establish and Maintain Effective Business Relationships with Parents.”  There were so many questions, Tom agreed to answer them for our blog and on his blog, Taking Care of Business.  Here are the questions Tom graciously answered:

References for Parents and Families

Q: “Can I get into trouble by referring a parent to another family child care provider, if something should happen to the child later?”

A: Possibly. If you are giving out names of other child care providers, you want to give a referral, not a recommendation. To protect yourself against a lawsuit, give out more than one name and don’t comment on the quality of the other providers. Don’t tell the parent much more than, “Here are some names of other programs that may have an opening for your child. This is a referral, not a recommendation.” If you are recommending other providers (“This person/program would be really great for your child.”) you run the risk of a parent suing you if the child is later injured.

Q: “A child care program is calling me about a family that I used to care for who now wants to enroll in their program. If I am asked whether I would care for their child again, can I say no?”

A: Certainly. There is no risk of slander (making a false spoken statement damaging to a person’s reputation) here. If you go on to give reasons why, you want to be careful not to make statements such as, “The father was an alcoholic” or “The mother didn’t express any concern for her child” because you can’t prove that they are true.

Q: “Can I legally say that the parents didn’t pay on time, without getting into trouble?”

A: Yes. If you have records that show the parent owes you money, then your statement is true.

Q: “If I call the previous provider, what can I say without saying too much? I’m concerned about the parent’s privacy.”

A: You are only calling the previous provider because the parents has given you permission to do so. You can ask the previous provider whatever you want and not get into legal trouble. (The provider responding to your questions can get into trouble if they commit slander.) The key questions to ask are “Would you do it again?” and “Is there anything I should know about the family that might cause me to not want to care for their child?” Of course, you can always be extremely respectful of the parent’s privacy and not pry or ask questions that are very personal.

Q: “Would another child care facility provide information to me about the needs of the child?  Aren’t there are privacy laws that protect a family in this situation?”

A: Not if the parent is giving you permission to ask questions of their previous caregiver.

Q: “Is this true – If I want to call references and ask them questions I won’t get into trouble, but if someone calls me for a reference I should be careful of what I say?”

A: Yes. You should not answer questions if someone calls you unless the parent has given you permission to talk to the other child care program. If you have such permission you should still be careful about what you say.

Contract/Policies

Q: “Should our rates and hours of operation be in our policies or our contract?”

A: Put them in your contract. Your fees and hours of operation are the two terms of your contract that are legally enforceable. All other program rules and procedures are policies that can’t be enforced in court. So, limit your contract to: 1) names of the parties, 2) all fees and hours of operation, 3) termination language, and 4) signatures of the parties. Put everything else in your policies.

Q: “I don’t let parents take my contract and policies paperwork home. I have a desk out in the lobby where they can fill out the paperwork. Sometimes I send out the paperwork to new enrolled families weeks before they enroll.”

A: Nothing wrong with this. Don’t sign the contract or policies until after the parent has signed.

Q: “What are the pros/cons of listing my hours of care in the contract versus listing the hours of my operation? I currently list my hours of care so I can make sure I’m meeting my licensing ratios.”

A: It’s always best to put in your contract the specific hours you are agreeing to care for each child, rather than the general hours of your operation. Each contract you sign with parents can contain different drop off and pick up times. You should make a separate decision with each parent about what their hours of care will be. You don’t have to offer care for the same number of hours for each parent.

Q: “Should all my rules about money be included in my contract? For instance: fees for late-pick up and bounced checks, holiday pay and vacation pay?”

A:  Yes. Put all matters dealing with money and the hours you are caring for children in your contract. Put everything else about how you provide care in your policies. Creating two documents can help you more easily manage your business.

Q: “Would renewing my contract be the same as putting an ending date on my contract?”

A: No. You don’t want to put an ending date on your contract because it can create problems later if the parent doesn’t sign a new contract before the old contract expires. You can renew your contract every year, or as often as you want. If you decide to make changes, put them in writing and sign the new agreement.

Q: “What if I put my late pick up in my policies. Can I still do something different for one family?”

A: Yes, you can have different policies for different parents. Your late pick up fee can be $1 for one family and $2 a minute for another family. You might base this on the second family being late more often than the first family.

Q: “My policies say that tuition is late if it’s not paid by 5:30 p.m. on Friday (for next week).  Would my late tuition fee start as of Friday at 5:30 p.m. (day 1) up to the day they finally pay it, including the day they pay?”

A: You can do whatever you want. If you charge $5 a date late payment fee, and the parent pays you on Monday morning, you could charge $20 (for Friday, Saturday, Sunday, and Monday) or $15 (for Friday, Saturday and Sunday). It’s up to you. Whatever you decide, be clear in your contract how much the parent will owe if they pay late.

Q: “Is it fair to charge parents for a holiday if I am closed for that day?”

A: It’s up to you to decide what is fair. Many parents get paid for holidays, so I think it’s reasonable for you to get paid for holidays.

Q: “In Miami centers do not require parents to sign contracts.  Is that not a deterrent for a parent to enroll their child in our center?  How can I make this more parent friendly?”

A: It’s possible that some parents may not want to enroll in your center because you don’t have a written contract that they can sign. They may feel uncomfortable that you are not going to follow reasonable rules regarding their child or they may feel that you might terminate care without being fair to you. You can always write up written policies and procedures that your center will follow, even if you don’t require parents to sign an agreement.

Q: “I need suggestions on what to charge employee’s children.”

A: There is no one standard that centers follow when they care for their employee’s children. Some centers give a discount in this situation and some don’t. If you do give a discount, you need to count the value of the discount as part of the employee’s salary (subject to payroll taxes).

Q: “Would I have to rewrite the parent handbook if I decide to use different rules for different parents?”

A: Yes. This would require you to revise your parent handbook to reflect the rules for each parent.

Enrollment

Q: “Is it okay to ask parents for a copy of their driver’s license before enrolling them in our program?”

A: Yes. If you are told by someone that a parent doesn’t have a driver’s license, then you must ask this parent to show their license before releasing the child to this parent. If the parent refuses to show you her license and takes the child, call 911.

Q: “What should I do as a staff member (who knows that the child won’t do well in the center), but the owner accepts the child anyway to boost enrollment?”

A: Other than telling the owner why you don’t believe the child will do well in the center, there’s probably not much else you can do. If the child struggles in your program, or leaves after a short period of time, you may want to talk to the owner again. Point out how much time and effort was taken with the child and why it was not a beneficial experience for the child.

Q: “Can I refuse care for a child who comes from a home with smokers and carries a heavy tobacco smell on their clothing?”

A: Yes. It’s illegal to discriminate against a parent or child based on race, sex, religion, national origin, and disability. In some states you cannot discriminate based on sexual orientation. Other than these restrictions, you can discriminate based on any other reason: smoking, uncooperative parent, unruly child, etc.

Q: “If I decide not to enroll a family, I’m afraid if I explain why there will be a lot of negativity or backlash from the parent. Because of this why shouldn’t I tell the parent, ‘I’m waiting to hear from another family?'”

A: Because you are then lying to the parent and this is not professional. Also, if you say this and the parent sees your program advertising to fill an opening the next week, the parent may assume that you lied to her and make a complaint to licensing and complain to other parents. It’s best to say, “I don’t think this is the best place for your child.” Don’t blame the child or the parent. Tell the parent you feel that the child would not do as well in your program as she might do in another program.

Holding Fee

Q: “Is a holding fee separate and distinct from tuition?”

A: Yes. A holding fee is paid by a parent in exchange for your promise to hold a space for their child for a period of time. You should get paid for your promise. If the parent doesn’t want to pay your holding fee, then don’t promise to hold the space.

Q: “If I charge a holding fee should I apply it to their first full payment, or just have it as a fee for added income?”

A: Don’t apply any holding fee to child care delivered later. You are giving up the right to fill the space and you should be paid for this. Don’t use the word “deposit” because it implies that the parent might be able to get it back. Use the words, “nonrefundable holding fee.”

Q: “We call it a registration fee.  How do you feel about that terminology?”
A: If a parent who wants to enroll right away pays a registration fee and a parent who wants to enroll their child two months from now also pays the same registration fee, then I don’t like it. If you are holding a spot for a child you should get paid for your promise not to enroll another family for that spot.

Q: “My problem with a holding fee is when it involves expectant parents….I do a two week holding fee but I always worry about what happens if they lose the baby and I cannot afford to refund their money, although I want to.”

A: You can decide whether or not to refund your holding fee if the parent loses the baby. You deserve the holding fee because you turned down other families who wanted the spot. But you can also give a refund because you want to help the family.

Custody

Q: “How do I address the issue of caring for a child whose parents were never married? The parents have not established legal documentation regarding custody.  Who has the legal jurisdiction regarding matters of the child?”

A: Biological parents have full rights to their child until the court takes them away. Some states do grant the mother the rights when the parents have never married. Unless one parent shows you a state law giving rights to one parent, you should assume that both parents have full rights. Therefore, either parent can pick up the child.

Termination

Q: “What happens if a parent does not pay, and you terminate care? Do you have to give them a refund for the last two weeks?”

A: Child care programs should be careful before they terminate an agreement with parents. If you terminate care you must follow the terms of your contract. If your contract requires you to give a two-week notice, then you must give it. However, you can still offer care for this two week period. If the parent has already paid you for this period, you can keep the money if the parent doesn’t show up. If you terminate immediately and the parent has paid you in advance, refund the advance payment, minus the money the parent owes you. I always recommend that child care programs put in their contract, “program/provider may terminate at will.” If you do terminate immediately you must refund any money paid in advance.

Q: “Why would I only want to give a two-week notice when they are wanting to leave?  My policy states a ninety-day notice. That gives me time to fill the spot.”

A: You are free to set whatever notice period you want. Ninety days is probably the longest you should put in your contract. Longer than that might seem unreasonable to a judge.

Q: “Our contract last year indicated that a family who pulled their children without providing 30 days notice to the school will forfeit 20 days of tuition.  This family pulled their child without notice following an incident between their child and another preschooler who pulled their child’s hair.  They had paid in advance for the year and were refunded all but 20 days of tuition as per the contract.  These parents are now demanding the 20 days tuition returned (involving legal counsel) as the school did not provide a safe environment for their child and they were forced to leave.”

A: Parents should expect that there will occasionally be incidents with other children that their child care program cannot prevent. In your case, it doesn’t seem reasonable for the parent to demand a refund when the contract clearly states they should not.

Enforcing Agreements

Q: “How do I get parents to pay after they leave the center?”

A: I get calls every week from child care programs about parents who leave owing money. The only sure way to avoid this is follow two rules. First, require parents to pay for child care in advance (at least one week). Second require parents to pay for the last two weeks of care in advance (assuming the parent must give a two-week notice before leaving). If you haven’t followed these rules, then your next step is to send the parent a letter demanding payment and threatening to take them to court if they don’t pay. After that, you must file a lawsuit in your local small claims court.

Q: “Part of my program is First 5 funded and there is alot of paper work required. How do you get parents to turn in the papers when asked to do so?” 

A: When enforcing any of your contract terms or policies, you must have a consequence for the parent not follow your rules. So, you can tell parents there is a fine for every day they are late with their paperwork, or you can terminate them from care if they continue to be non cooperative.

Q: “How do you suggest we start upholding policies if we’ve let them slide in the past? Give a written note stating that as of (date) the policy will be enforced?”

A: Yes. Tell them you just attended a webinar in which contracts were discussed and you are now going to enforce your rules effective immediately or within a few days.

Q: “When you have a family that does not pay you the full amount due, what are the steps you can take?”

A: You have three choices. First, you can let it go and not worry about the parent paying you in full. Second, you can tell the parent there are consequences for not paying you in full (fines or termination). Third, you can quit your job. There are no other choices.

Q: “We have never pursued anyone who left without giving a two weeks notice in court because it seemed like too much trouble.  Are we making a mistake?”

A: You should win your case in court, but sometimes judges side with parents for no good reason. Therefore, there’s no guarantee you will win. You may want to go to court once to determine if it is worth your time. The only way to avoid court is to require parents to pay in advance.

Q: “If parents have problem paying fees, how do I get the late fee from them?”

A: Tell them you will not provide care until the late fees are paid.

Pickup

Q: “A parent picks up her child on a bike. Would I be liable if they get hurt when going home?”

A: Probably. You are a mandated reporter of child neglect. This sounds like a situation where the child is in danger. If you fail to convince the parent to use another transportation option, or you fail to report this to child protection or the police, you could lose your license. In addition, you could get sued for failing to take reasonable steps to protect the child.

Q: “What should I do if the parent is within walking distance to the program but I clearly know she has been drinking and is impaired?”

A: You have a duty to keep the child safe and report to the proper authorities if the child is in danger. Clearly, it is unsafe for a child to be left alone with a parent who is impaired. Therefore, you should report this to child protection. To try and prevent this from happening, tell parents you must report such situations and discuss alternative plans.

Q: “I have a dad that picks up three children on a motorcycle with no helmets!”

A: If state law requires helmets then the dad is breaking the law and you should report this to the police. Even without a helmet law you should tell the parent that you will report them to the police because it is unsafe for the children. Establish a transportation policy that allows you to call others in such situations who can transport the children safely.

Q: “I called the police and then reported a no car seat pick up. The police response was: I can ticket them and there will be a court date, but usually we don’t do  much with this situation.  What’s my recourse?”

A: Tell the parent you will call the police every time they fail to use an appropriate car seat. Failure to do so means you are not doing your job as a mandated reporter. You can also tell the parent that you will terminate them if it happens again. Your program is running a risk of a lawsuit if this continues.

Americans with Disabilities Act

Q: “Can we charge higher rates for special needs children?”

A: No. If you determine that the only way you can provide reasonable accomodation for a child is to hire another person and the parent volunteers to pay this extra cost to your program, you can accept their money. But you can’t ask the parent to pay more.

Q: “Can you tell a family of a child with a disability that we cannot accommodate their special needs in our school?  For instance, we have a classroom that has children with special needs in it. However, we feel that by accepting additional students it would put the room in jeopardy of not being able to meet their needs. In this situation, can we say no to this family?”

A: It’s complicated. When considering enrolling children with a disability you must always come up with a solution for providing reasonable accommodation. In your case, this might mean hiring an additional staff person or integrating the children into other classrooms. If the solution involves a “significant difficulty or expense” to your program, then you can say no to the family. I would guess that additional staff may solve this problem. If so, you need to find out what the cost would be before determining that this is a significant expense to your program.