Contracts and policies clarify expectations and responsibilities and help avoid potential misunderstandings and conflicts. There is no rule as to what should be included in contracts and policies. However, considering the demanding and highly regulated nature of childcare, it is extremely important that expectations and responsibilities are clear between the provider and employees; and the provider and parents.

The use of contracts and policies also convey professionalism. Not everyone appreciates that family childcare providers are supplying a professional service; little is understood about the training that must be received, ongoing education requirements, and the many ways that family childcare supports child growth and development.

Contracts and policies also present an opportunity to convey a message about the provider and the program, and can serve as marketing tools.

What is the difference?

At-Will Employment

At-will employment is an employment arrangement in which the employee may quit at any time, or the employer may fire the employee for any reason that is not illegal. For example, an employer may fire an at-will employee for poor performance or to cut costs. However, it would be illegal to fire an at-will employee for:

  • Discriminatory reasons (race, sex, religion, ethnic background, national origin, disability, political/recreational activities outside of work, legal use of consumable products outside of work, or union membership); or
  • Retaliatory reasons against the employee such as reporting harassment, negligence of a child, violating a childcare licensing rule, or because the employee exercised a legal right.

While an agreement may stipulate that the provider wants the employee to give some notice, the employee doesn’t have to honor this.

Employer/Employee Contract (Contractual Employment)

An employer/ employee contract is an employment arrangement in which the employee/ employer ability to separate is limited by the terms of the agreement. Furthermore, this type of agreement may create unanticipated rights for the employee.

Tom Copeland, a leading expert on the business of family child care, recommends the following: “When preparing or reviewing your employee handbook:

1) Include the following language in your handbook: “This is an ‘at will’ employment agreement. I, as the employer, may fire you for any reason at any time and you, as the employee may quit at any time.”

2) Don’t spell out any conditions under which an employee can be fired (e.g. “Employee may be fired under the following conditions…”). This could be interpreted as creating limitations on your ability to fire your employee.

3) Don’t put a time frame in your handbook (“This agreement will be for six months/one year”). Don’t create a probationary period. You want to maintain the ability to fire someone at any time.

4) Ask the employee to sign your handbook acknowledging that he/ she is an “at will” employee. Give them a copy.”


Why a contract and policy manual are recommended:

Given the demanding and highly regulated nature of childcare, it is extremely important that a provider and his/her employees are clear about expectations and responsibilities. Creating an employee contract as well as a policy manual will meet this requirement and help the provider avoid misunderstandings and conflicts.

Furthermore, the health and safety of children under the care of the provider and /or his/her employees’ may very well depend on a clear understanding of the scope of work, policy, and procedures developed.

Employee Contract

Although there are no rules regarding what should be included in any written employer/ employee contract, here are some recommendations for language to include:

  • Name and address of the business and new employee, as well as salary details;
  • Benefits (if any);
  • Paid holidays (if any); or
  • Sick days (if any);
  • A sign-off where an employee indicates (via signature or initials) that he/ she has received, read, understands, and agrees to the job description;
  • A sign-off where an employee indicates (via signature or initials) that he/ she has received, read, understands, and agrees to the employee policy manual; and
  • Indications that “this is an ‘at-will’ employment agreement,” Establishing an “At Will” Employment Agreement versus an Employer/Employee Contract, etc.

A job description, along with the described details, should be discussed as part of the recruiting and hiring process.

For information regarding your state’s minimum wage click here.

Under New York State Labor Law, payment for unworked hours is not required unless the employer has established a policy to grant such pay. Holidays, sick time and/or vacations fall under “time not worked.” When an employer does decide to create a benefit policy, the employer is free to impose any conditions he/ she chooses. See NYS DOL Wages and Hours: FAQs.

Employee Policy Manual

Some recommendations as to what to include in the Employee Policy Manual are:

  • Policies regarding:
    • Work hours
    • Schedules
    • Attendance
    • Punctuality
    • Absences
  • Details about the staff evaluation process
  • Privacy/confidentiality policy
  • Child guidance policy
  • Dress code
  • Emergency procedures, etc.

A provider must clearly explain that necessary deductions will be made for federal and state taxes.

In addition, the provider should include his/her company’s legal obligations regarding overtime pay, and information about pay schedules, performance reviews, salary increases, time keeping, breaks, and bonus compensation. Learn more at U.S. DOL: Labor Laws for New and Small Businesses.

Regardless of the nature of the arrangement, the employment agreement should be signed before the employee begins work.


Since there is no rule about what must be included in any written document, the provider will need to determine what to include in the parent contract.

Commonly, a contract addresses the following:

  • Name and address of the business and the parent(s)
  • Child names and date of birth
  • Days and times that each child will attend the program
  • Holidays the program will be closed
  • Deposits (advance payments)
  • Non-refundable holding fees
  • Payment due dates
  • Acceptable forms of payment,
  • Fees for returned payments
  • Fees for late pick-up
  • Sign-off where parent(s) indicates (via signature or initials) that he/she received, read, understands, and agrees to the parent policy manual
  • Process for terminating contract

Payments are usually collected weekly on Friday for care for the week that just ended, or they are collected weekly on Friday for the care that is to be provided beginning the following Monday. Collecting payments in advance minimizes the chance that the provider will find be unpaid for services rendered.

Deposits (advance payments) can serve as protection against non-payment. The range is one to two weeks, but this may be difficult for some parents. A provider can offer a parent the option to pay in increments over the first weeks their child is(children are) in his/her care.

The provider may also consider a “non-refundable holding fee,” which is to be applied to the last two weeks of care. Relatedly, it is recommended that he/she specify that the parent provides two weeks notice of termination of the contract. This way it is understood that the payment is not to be returned.

The provider will need to determine the policy regarding receipt of payments via personal check, and charges (if any) should a check be returned for insufficient funds. Penalty fees are commonly incurred not only by the payer, but also the payee.

Since family childcare providers are often women with families of their own, they can be extremely sympathetic to the challenges faced by others when caring for a family. Consequently, family child care providers quite often find themselves accommodating parents; foregoing late pick-up fees, eliminating deposits and/or holding fees, continuing to care for the child while the parent is in arrears, etc.

However, parents may interpret these gestures of kindness to mean that the contract is no longer in effect. In order to avoid this misinterpretation, a provider may want to include the following wording in the contract: “Failure to enforce any term or provision in this contract does not invalidate that provision, term, or any other provision or term of this contract.”

Learn more about maximizing results here.

Note: A parent cannot agree to forfeit the right to file a suit against you and/or your business. To learn more about this listen to a  Tom Copeland Podcast here: Will Liability Waivers Protect You?


Parents are essential partners in a childcare provider’s program. A relationship built on communication and trust will enable the provider and his/her staff to work with families to provide the best care for every child enrolled in the program.

There are a number of ways that a positive relationship may be fostered with a parent, and first impressions can go a long way.

A provider’s policy manual can very well shape this first impression. The mere fact that there is a policy manual in place exudes professionalism—fosters trust and respect. The policy manual should be consistent with all other documents, flyers, business cards, etc.

Be advised that the policy manual can be overwhelming, both to the parent and to you, the provider. The policy manual needs to be very detailed, covering every characteristic of the program as well as emergency and administrative procedures.

The New York State registration/license application can essentially be viewed as a policy manual.

In order to make the policy manual less overwhelming to the reader a provider can:

  • Be very precise with wording;
  • Select fonts that are legible;
  • Include a cover page with the program name, logo, and branding; and
  • Print in booklet format.

Areas to cover include:

  • Welcome
  • Program philosophy
  • Provider’s qualifications (and employee qualifications)
    • Registered/license
    • Trainings completed
    • CDA (Child Development Associate) status
  • Enrollment Process
    • Medical records (physical exam and up-to-date vaccinations)
    • Names of persons that can drop-off and pick-up a child
    • Emergency contacts
    • Signed parent contract
    • Items parents must supply (i.e. change of clothes, diapers, wipes, formula, etc.)
    • Trial period
  • Hours of operation (a parent contract determines when a child is cared for)
  • Early drop-off policy
  • Late pick-up policy
  • Payment policy
  • Deposits and/or non-refundable holding fees
  • Late payments
  • Visits to program
  • Vacations
  • Other absences
  • Daily routine
    • Curriculum
    • Activities
    • Meals
    • Naps
    • Outdoor play
  • Toilet Training policy
  • Behavior management
  • Property damage
  • Pets (if any)
  • Birthday policy
  • Field trips (if any)
  • Photo/video policy
  • Health plan
  • Mandated reporter
  • Emergency plan: Evacuation/relocation (abbreviated version)
  • Emergency plan: Shelter-In-Place plan (abbreviated version)
  • Termination of contract
  • Sign-off parent contract

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