Why Do I Have To Pay For My Child Care Providers Time-Off?
A common complaint echoed amongst parents is having to pay for child care even when their child is not in attendance or their child care facility is shut down.
The problem is that most parents are not aware of how the licensed child care industry operates. Licensed child care providers are businesses and not government employees. They are responsible for their own pay, benefits, retirement, and are completely self-supporting. The only way a child care provider can ensure continuity of income is to create contracts with parents that allow them to have time-off and vacation pay.
Parents on the other hand are left stranded. When their child care facility shuts down they have to pay and find back-up care or take the day off. It is a double loss of income for them. What is the alternative though? Providers are also entitled to a break, and to take time off when they get sick. Why should they not be awarded the same rights as other working professionals in other industries? The other issue that confuses parents, is the lack of consistency in child care policies, amongst different facilities. Parents are often eager to compare daycares with other daycares or babysitters and nannies who operate on a on-demand basis. This lack of understanding between parents and providers and creating a growing rift in the child care community.
So how do providers get paid for their time-off and keep parents happy? By offering parents flexible child care options that allows them to take time-off as needed and charging them more on a daily basis for that option. The concept is simple, instead of having a vacation pay or time-off accrual that you collect when on break, you collect a daily amount instead, thereby avoiding any issues, terminations, or complaints. By collecting time-off pay on a daily basis most facilities can earn more by having parents pay more for the option of not being in a contract.
How does it work?
We will first we have to do some math. Let’s look at the following example of ABC daycare:
ABC Daycare’s License allows for 8 children, on average they books 6 children for the year. Each child pays $300 per child/ per week, that is $60 per day/ per child.
If we break that down into hourly ($60 per day/10 hrs) it’s only $6 per hr/ per child. ABC Daycare takes 20 days off in a year. Each family pays $60 per day, and they usually have 6 children in attendance.
ABC daycare accrues $7,200 (20 days x $60= $1200 x 6 children)in vacation and time-off pay annually. ABC daycare generally operates 252 days in a year. If we divide $7,200 into 252 days, that is only $28 per day increase.
This $28/ increase would be split amongst the 6 parents, which equals $5 increase per child (rounded up). Let’s check the math: $5 per day x 6 children= $30 $30 x 252 = $7,560
This means for an additional $5 per day per child ABC daycare could take their time-off as needed, not charge the parents in their care, and earn $360 more for the year by allowing flexible care.
Formula to calculate rates and vacation pay:
Weekly amount per child/ days open= Daily cost per child per day
$300/5= $60 per day
Daily / total hours open per day = Hourly Cost per child
$60 per day/10 hrs= $6 per hr/ per child
(Days off in a year x daily rate) x total number of children.
20 days x $60= $1200 x 6 children= $7,200
Formula to calculate daily vacation pay:
Vacation pay / days worked in a year = Per day increase
$7,200/ 252 days= $28 per day
Daily increase/ total number of children= Per child daily cost increase
$28/ 6 children = $4.666, approximately $5 increase per child (rounded up).
By charging parents a few dollars more per day, child care facilities can avoid vacation-time turn-over, arguments with parents, and earn top dollar.