We all have so many questions right now. Like when will this be over? Will our businesses survive? How will I get through this financially? But I’ll bet you are also wondering if you could have done anything to protect your childcare income during a crisis like this. Especially if you have had to close your business because of it. Was there a childcare contract clause that would have addressed this? Well, today I’m going to try to answer that question.
The Contract Crisis Clause
After watching childcare closures and seeing my fellow providers in need of, but not receiving, government funding to keep their businesses from dying, I couldn’t take it anymore. I had to know!
Was there anything we could have done to protect our childcare income in the face of a pandemic like this?
What Does the Expert Say
So I decided to get an answer to that question and I reached out to Tom Copeland, a respected authority in childcare business issues, to get some input.
I asked Tom, “Should providers add certain verbiage to their contracts, handbook, etc. that covers “acts of God” or natural disasters? If so what would that look like? Also, should we have some type of clause or something that allows for a negotiation of a reduced amount to hold the spot for clients if they are voluntarily not attending?”
According to Tom, he would suggest using language that says “public health emergency” or words to that effect. He said “I don’t think “acts of God” are clear enough. You can always negotiate a reduced payment for some parents in good times or bad. You don’t need to put that in your contract, because it’s within your power always.”
EXAMPLE: Childcare tuition is expected/required regardless of attendance which includes during a public health emergency.
Is it Fair?
So now I’ll bet you are wondering if considering the circumstances right now, is a clause or enforcement of a clause like that fair.
Well if you watch the news I am sure you have seen that many other monthly service-based businesses like gym memberships and even larger daycare centers are requiring payments right now. Even though they are not open during the crisis.
In an article I read recently, a parent was upset that her daycare was requiring her to pay tuition even though they were closed.
What I found most interesting about the article was the response when the writer reached out to the Attorney General’s Office. “They tell us if you have a contract with the daycare the AG’s office cannot intervene. They recommend you contact a private attorney about your rights.”
Apparently, the attorney general’s position would be to look to the contract between the parent and provider to determine whether payment should be expected.
Not a Magic Bullet
And I know you may be thinking that the financial crisis caused by this pandemic is no one’s fault and to expect parents to pay would be unfair. But remember, you are running a business. Which is why you have a contract in the first place.
50% to hold the spot
That being said, as Tom said, you can always take your policy and negotiate terms with your clients. Maybe, you would want to require only a certain amount to hold a spot until you reopen or your families feel comfortable returning. Like, say 50%. You can do that!
The addition of the childcare crisis clause to your contract is by no means a magic bullet. Nor is it written in stone. You can always change it.
But what it does do is establish a policy or a baseline if you will from which you can work from. A place to start!
Remember it’s your business! And you set the rules. So you can negotiate, waive, etc. when it comes to your policies. The key is to have the policies in place.
Should you add a Childcare Crisis Clause?
So whether you agree or not when that parent, my advice would be to consider adding that childcare crisis clause to your contract now. That way moving forward, should we ever be in a situation like this again (God forbid) your business will have a policy to stand on.