Child Care Shutdown for Coronavirus: Do I Still Have to Pay?

The coronavirus pandemic resulted in almost every state issuing shelter-in-place orders, which pertain to all but “essential businesses.” Most child care facilities and home day cares closed their doors, and many independent caregivers stopped coming to their clients’ homes. Parents need to know whether they are still obliged to pay for child care services that they are no longer receiving.

The answer depends on whether you and your provider have a written contract, and what that contract says (and whether you receive a subsidy). But what if you don’t have a written agreement, as is often the case with independent caregivers? In that case, the outcome will hinge on the application of basic contract principles.

Child Care Centers and Family Day Care

If you take your children to a day care center or home, chances are you were given a contract to sign before your children could enter. Most states have licensing laws that require day care centers to have adequate space, amenities, insurance, and staffing. A thorough law will also require the center to give you a contract.

Termination Conditions in the Contract

California’s law, for example, requires that the center offer an agreement that covers costs, payment details, notice periods for modifications to service and, most importantly, refund conditions. The law also requires that the contract specify the conditions under which the agreement may be terminated—by either side. (22 CCR Sections 101219.)

While insisting that the center and the parents enter into a written agreement is an important first step, the next part—specifying under what circumstances the center or the parents can terminate the agreement—is left up to the parties. So you’ll need to look at the contract, and search for words and phrases like these in a termination or closure clause:

• “public health emergency” or similar words. This clause might say that parents must continue to pay even if there’s a declared emergency. But it’s unlikely that a court would enforce this for more than 30 days.
• “emergencies” or “unforeseen circumstances.” These terms are quite vague, and for that reason, a judge would be unlikely to rule that you are expected to pay during a long closure due to the pandemic. Parents have a powerful rule on their side, here: If a contract term is vague, it will be interpreted against the party that prepared the contract. The reasoning is that the drafter had a chance to get it right, and if he didn’t write a clear clause, he should be the one to suffer the consequences.

Parents With Child Care Subsidies

If you receive a subsidy from the state and your provider is closed due to the coronavirus pandemic, the provider might continue to be paid for at least a month. And, if you cannot send your child to the provider due to the stay-home order, your child should not be disenrolled. Check with the state agency that administers your subsidy for the rules in your state.

Parents in California who receive subsidies can get excellent information from The Child Care Law Center, including details on Emergency Child Care vouchers.

Individual Child Care Providers

If your children are cared for by an individual, and you do not receive a state subsidy, whether you must continue to pay for care depends on what your contract says or, lacking a contract, common principles of contract law.

Read Your Contract

Refer to the section above, “Termination Conditions in the Contract,” and look for the words and phrases explained there. If the contract doesn’t include them, read the next section.

Silent Contracts and No Contract

Many parents who work with individual providers find themselves in this predicament: a contract that doesn’t address what happens if the individual can’t come to work (or the child shouldn’t interact with the provider); or no contract at all.

• The provider is not working. Under general contract principles, when a service is not being provided, the party paying for it is excused from paying. It’s unlikely that you can get back any money paid in advance, however.
• You’ve decided to not have the provider continue to care for your child. Your provider might be willing to work, but you’re worried about exposure; or you are taking seriously the government’s order that people not mingle unless an essential service is required of them. In this situation, you’re the one ending the service, but you’re doing so in order to follow government mandates. In fact, failure to socially distance (which will happen when the provider cares for your child) is a misdemeanor in some states. If your provider were to sue you later for lost wages, a judge might be persuaded that any continued employment by you would be a violation of law, and for that reason, you were justified in calling the relationship quits.

Consult With an Attorney

If you have questions about the validity or interpretation of your child care agreement, consider consulting with an attorney who practices general business law. Many lawyers are set up to work remotely, and they should be able to get the information they need either over the phone or by email or text (you can photograph your contract and text it). The questions you'll be asking are quite capable of being answered, even if you're not physically sitting in the lawyer's office.