Daycare is not just a regular service, as it involves safety, trust, care, and strong coordination between both parties. When these terms are not clearly defined, small issues like late pickups, payment delays, scheduling changes, and extended care time can turn into big conflicts.
This is why it’s important to have a proper legal agreement between parents and the daycare center or independent childcare provider. By using a professional template, parents get clarity about the level of care their child will receive. While for childcare providers, it offers protection by clearly defining polices and expectations.
WordLayouts’ Daycare Contract template is a comprehensive document that includes all relevant clauses important for such contracts. This fully editable template can be customized to align with your preferences and state regulations.
Before we talk about the template itself, let’s first understand who can use this template.
Who Can Use a Daycare Contract Template?
Childcare services can be structured in different ways, i.e., formal daycare settings and informal care arrangements. This template is designed to work across these different setups.
In simple terms, a daycare contract is a written formal agreement between parents/guardians and a childcare provider that defines the terms under which care will be provided. It can be used by:
- Independent care providers (contractors) offering services.
- Daycare centers or registered home-based businesses.
- Parents or guardians hiring childcare providers.
Here is the step-by-step breakdown of how to finalize a daycare contract template using our pre-built template.
Basic Setup
Start by mentioning your city and state and the date on which the contract is being signed.
After that, write down the names and the residential addresses of the parents/guardians and the daycare provider. Our template mentions two types of daycares: center-based and home-based. Select one that is best suited for your arrangement.
In clause I, provide child(ren) details, including their names and date of birth. Our template allows adding up to four children in one contract, but ofcourse you can add more rows.
Types of daycare arrangement
As mentioned before, daycare arrangements are classified into two categories, i.e., formal arrangements and informal arrangements. Here, it’s important to classify these arrangements, as it alters the licensing requirement, contract structure, and legal obligations.
- Formal setting: Formal daycare settings usually require regulated and licensed care providers. It is further categorized between center-based and registered home-based daycare (depending on where care is provided). These licensed providers are required to comply with state safety, staffing, and training regulations.
- Informal setting: An informal setting refers to private arrangements where a license is not a requirement for the provider, depending on local laws. It includes occasional babysitting arrangements, or a relative, friend, or neighbor caring for the child.
In many informal childcare arrangements, the childcare provider offers services independently. This means they aren’t employed by the parents or by a daycare center. For example, a neighbor or a friend taking care of your child in their own home or at the child’s home. These kinds of informal care providers don’t generally require a license and are responsible for handling their tax obligations and working schedule.
This also means they are not required to do regular monitoring for health and safety standards, background checks, or training, such as first aid and CPR certification.
Now, let’s classify between center-based daycare and home-based daycare.
Center-based vs home-based
Within a formal setting, daycare services are generally provided in two types of settings: center-based and registered home-based. Here, it’s important to understand the difference, as it can help both parties customize the contract terms accordingly.
Center-based daycares are often referred to as daycare centers or preschools. These are the kind of programs that introduce children to a wider range of educators, carers, and kids. It gives them the opportunity to be in an outside setting where they may engage with other kids and their surroundings. Centers often have more extensive facilities, such as larger playgrounds and classrooms. On the flip side, home-based daycares are the kind of setting that takes place in a caregiver’s home. This typically means a smaller, more home-like environment.
Moreover, center-based daycares are more expensive and have a higher upfront cost as compared to home-based settings, which are 30% more affordable and have lower upfront costs. But center-based daycare settings can have more revenue than home-based ones as they operate on a larger scale.
Scope of Care
Clauses II, III, and IV of this template define the scope of care of the caregiver, which includes services and responsibilities, working schedule, and extended care policies.
II. Services and responsibilities
Under clause II, the childcare provider will provide a safe, nurturing environment to the child(ren) under their care. We have kept this section flexible by providing blank space. The care provider and the client can list all the responsibilities essential for the child(ren)’s development.
III. Schedule
This section provides a customizable weekly schedule of caretaking. We have added checkboxes with weekdays so that you can select those on which the services will be provided. Other than that, our template also allows both parties to write down the start and end times of the service after mutual agreement.
IV. Extended care and late pick-up policy
This clause has been added to deal with extended care and late pick-up cases. It deals with pre-approved overtime and unapproved overtime differently. This provision also allows the provider to charge additional fees for extended care.
Our template further adds a late pick-up policy so that parents can understand their obligation regarding timely pick-up. The template provides two options here;
Our template allows care providers to set a grace period exceeding the pick-up time. In case of further delay, it gives two options.
- Parents will be charged a late pick-up fee based on a minute or hourly basis.
- No late pick-up fee will be charged.
You can check the option that fits your setting.
V. Holiday Closures
Sometimes people perceive that services like childcare or caregiving are available 24/7, but this is not the case. That’s why we have added a separate clause that highlights the unavailability of the daycare provider on recognized holidays. Our template uses checkboxes throughout this section and lists 10 US national holidays. You can select ones that apply to your situation. Also, we have added the “other” option, which both parties can fill after mutual discussion.
Here, our template also explains how the care provider will be paid during a scheduled holiday. We have added two options: full payment and fee adjustment for days when daycare is closed. Check the box that seems best for your situation.
VI. Vacation Policy
This section explains how the vacations are handled for both parents and the daycare provider. Our template allows both parties to set a mutually agreed-upon advance notice period for any planned vacation or closure. It also allows parties to decide how the tuition fee will be handled during the care provider’s vacation or the child’s vacation.
☐ Required to pay for daycare services during the absence.
☐ Not required to pay for daycare services during the absence.
You can select one that applies.
VII. Absences and Attendance Policy
Under clause VII, the parents/guardians should inform the daycare provider or independent childcare provider about the child’s absence in advance. In case of uninformed absence, the parents/guardian will have to pay a fee just like regular days. Moreover, our template gives three payment options in case of an informed absence.
- No fee
- Partial fee of $_ per missed day
- Full regular fee.
Select after mutual agreement of both parties.
Determine Compensation
Clauses VIII, IX, and X of the template decide how the daycare providers or independent childcare providers will be compensated for their services. Let’s discuss payment amount, payment schedule, deposit, and additional charges in further detail.
VIII. Payment amount and schedule
Under this clause, parties get to decide the rate of childcare services (per child) and how the fee is calculated, i.e., per hour, per day, per week, or per month. Select the option that best fits your arrangement.
Next up, the template lets the parties decide the payment schedule. For instance, will the care provider be paid daily, weekly, monthly, or other? “Other” can be used to specify a custom payment schedule agreed upon by both parties. For example, it could be bi-weekly (fortnightly).
After the payment schedule is set, the parties can decide on an acceptable payment format. Our template provides 5 options
- Cash
- Check
- ACH transfer
- Mobile payment app
- other
Lastly, the clause further introduces late payment penalties and allows the provider to suspend services in case of non-payment.
IX. Deposit
A deposit amount is usually required to confirm any childcare arrangements. This clause explains how the deposit amount is handled. First, our template gives two options
- No deposit required prior to commencement of daycare services
- Deposit required
Here, you state the amount of the deposit. Our template also leaves space for explaining what can be covered from the deposit. For example: unpaid fees, damages, or other agreed-upon expenses. The template also requires the daycare provider to communicate any use of the deposit in writing, along with a clear explanation.
Lastly, the section talks about whether the deposit will be refunded at the end of the arrangement or retained by the provider, depending on the selected option.
X. Additional charges
Daycare providers should communicate any additional fees to parents/guardians in writing. It could be a field trip, a special event, or other activities. The parents must be informed in advance about the details of the event, the amount, and the payment deadline to avoid any problems later.
XI. Emergency Procedures
This clause outlines the procedures to be followed in case of an emergency. First, they need to contact parents using the contact information provided in the agreement. Secondly, if the situation needs urgent medical help, call 911 without delay.
If parents are not reachable, try calling the emergency contacts listed below. Our template allows listing two emergency contacts along with their phone numbers and relationship. It also includes an authorization from parents to contact emergency contacts in case parents are not reachable in a timely manner. You can also use our daycare emergency contact form template for this purpose.
Moreover, our template also gives other instruction options where parents can write down any special instructions regarding treatment in case of a medical emergency. For example, if your kid has any known allergy to a certain drug or medication. Write it down here.
XII. Allergies
This clause is specifically added to manage any allergies a child has to ensure safety. In case your child has no allergies, select option one, but in case they have allergies, choose option b. Our template also allows parents to provide known information about the child(ren)’s allergies. You can write the name of your child and the allergies they have in the parallel space.
By documenting this information in advance, the provider can follow appropriate precautions and care instructions for the child’s safety.
XIII. Damages
Under this provision, if the child causes damage to the provider’s property (anything beyond normal wear and tear), then the parents/guardians will be financially responsible for it. It could be breaking windows or damaging equipment, etc. In case of any damage, the provider should promptly notify parents, as they will have to pay for the reasonable cost of repair or replacement of the damaged items.
XIV. Termination
This section explains how and when the agreement comes to an end. It allows the parties to choose whether the contract will end on a specific date or if either side can terminate it by giving advance written notice. Our template allows both parties to set a notice period and termination date. We have also added a third option, “Other,” where parties can write any provision they come up with after mutual agreement.
It also makes it clear that ending the agreement does not cancel any existing responsibilities. Any outstanding payments, return of property, or other obligations must still be fulfilled even after the agreement ends.
XV. Tax Obligation Clause
This clause is specifically added for child care providers who are classified as independent contractors. For example, a caregiver running their own business or hired through an agency.
An independent provider will be completely responsible for tax obligations at the federal, state, and local levels. This also includes self-employment taxes (such as Social Security and Medicare), federal and state income taxes, and any required business licenses or permits.
This provision makes it clear that the parents are not required to withhold taxes or provide employee-related forms like a W-2. A W-2 is a tax form that an employer gives to an employee at the end of the year to report how much they earned and how much tax was withheld from their pay.
However, if payments exceed the required threshold, they may issue a Form 1099-NEC for reporting purposes. According to the IRS, this form is used when payments to an independent contractor exceed $600 in a calendar year. However, the issuance of Form 1099-NEC does not determine worker classification.
Boilerplate Clauses
XVI. Confidentiality
It is a standard legal clause that is added to maintain the privacy of both parties under the agreement. According to this, a caregiver shouldn’t share clients’ personal, medical, financial, or private information with any third party, even after the term of this agreement. It includes any kind of information regarding parents and their children.
Moreover, the provider should also not post or share any photo or video of the child unless authorized in writing by parents/guardians or required by law. Breach of these terms can lead to immediate termination of this contract.
XVII. Dispute resolution
This is like a road map designed to deal with disputes. In case of a disagreement, the first suggested step is to resolve it through a discussion. The template has space for adding a deadline for resolving the matter through discussion; otherwise, the next step is mediation. Our template leaves spaces here so that you can add your city and state name accordingly.
In case mediation couldn’t bring the desired result, then the last resort is to pursue legal remedies in a court of competent jurisdiction in the same state and country.
XVIII. No waiver
This is a standard clause that ensures that a party’s failure to enforce a provision once doesn’t waive the right to enforce it in the future. For example, if a parent picks up child 1 hour later than the set time and the care provider doesn’t object, that doesn’t mean that they can’t object to it in the future.
XIX. Amendments
This clause, as the name suggests, is related to modifications and changes in the contract. As per this provision, any change in the contract must be in writing, agreed upon, and signed by both parties. It also nullifies any verbal or informal changes.
XX. Governing law
This section is added to clarify that the contract is governed by the state law under which both parties are functioning. Our template leaves a space here; you can customize it according to your state.
XXI. Severability
This is a standard boilerplate clause added to ensure that the agreement shall remain in full effect in case any provision is declared invalid, illegal, or unenforceable by a court. The problematic provision can be changed to make it enforceable, but the rest of the agreement still stays valid.
XXII. This section allows both parties to include any mutually agreed-upon terms that are not already covered in the agreement. You can write down your conditions if you have any; otherwise, write N/A.
XXIII. Entire agreement
Lastly, this clause ensures that both parties have read and understood this agreement and sign it after having no objections. It makes the contract legally binding.
Summary
A daycare contract is an important document when it comes to preventing misunderstandings and establishing a smooth working relationship between parents/guardians and daycare providers or independent childcare providers. By following a formal agreement, both parties can ensure that expectations are clear for both parties.
Our daycare contract template helps provide this through a professionally structured contract that reduces the risks of misunderstandings and facilitates a cooperative environment.
In our editable contract template, you can review and remove any clause that doesn’t apply to your situation. So, save yourself the hassle of drafting a contract from scratch and download our ready-to-use contract. The template is available in multiple formats, including Google Docs and Microsoft Word.
