Printable View
I have a question about contracts and raising fees.
The contracts that I have had parents sign do not have an "expiration date"--this is something that did not occur to me when I was making the contract.
I would like to raise my rates at the beginning of next year, but I am wondering if I will get some pushback from parents, because there was nothing mentioned in the contract about the potential for me to raise rates.
Am I stuck with the current rates for as long as these parents stay with me?
Great question...I am in the same situation.
Stores don't post signs saying prices subject to change at any moment - just imagine if the gas stations had signs like that - as if we didn't know they already did that. Everything goes up at some point.
A lot depends on how much you intend to raise your rates. And then decide if it is truly necessary. I am one that doesn't raise my rates for existing families but new families coming in pay a new rate. If mom goes on mat leave and leaves first child fulltime, new sibling comes in at old rate too. If mom goes part time then first comes in at old rate but new child comes in at current rate on their start date which is usually a dollar or so more. If child is pulled during mat leave then both come back at the then current rate - it is in parent's best interest to leave child in care.
The most I ever have a child is 3 1/2 years from 1-3 till they start school since I don't do JK so it seems to work out not to raise them for current families.
When I did have JK the parents had the option of keeping their old fulltime rate or moving to the new JK rate since they were changing contract it is subject to rates in effect at the change.
I would give the parents plenty of warning and also make it clear when they need to let you know by. There is still a chance that if your rates are high for your area that the family will still leave giving you just the minimum notice in your contract but that is a risk you have to take. Not all people get annual salary increases and many are under a wage freeze so even if you feel you deserve the raise make sure you think your families can afford it because it is sometimes better to keep the families you have at the lower rate than advertise for families to come in at the new rate.
You don't mention how long you have had your current rate or how your program has changed as that might be one of the reasons to give parents in that it no longer covers the expenses of the program.
I have never been a fan of raising rates in January since parents are just coming off Christmas and the credit card bills are starting to come in and then they have to pay an extra $20 a month in childcare. I tend to use September with the idea of the new school year but mostly because I am usually replacing kids leaving for school so those coming in Aug-Oct to replace them are starting at the new fee.
My contracts do not have an 'end date' either - if I do not make changes to the current one it remains in effective until 'termination notice is given' however they do have a clause that contracts and policies are reviewed annually and any changes will be accompanied with 60 days written notice ...at that time they either accept and sign a new contract reflective of those changes or they give notice to terminate the contract and seek service elsewhere.
I also agree that just because you did not put that 'clause' wording in there does not mean you are not free to change your fees or service or policies with current clients - you would just draw up new contracts and send out a letter explaining that due to XYZ you are having to ask parents to renew contracts with the new fee ... if they choose NOT to accept those new conditions they are free to seek service elsewhere.
Personally I have never had a client balk at a fee increase - they value the service offered and recognize that quality childcare is an investment in their child's future and their peace of mind while at work!
Haha, I like your analogy playfelt. I DO have my contracts renew annually on November 1st. The reason I have the families resign once a year is because I'm constantly learning new things and running into new situations so I am able to add a new clause or amend anything a bit for the next year.
I am raising my rates this year for the first time in 3 years and I have told the parents that it is because of rising food costs and the cost of living in general. I don't think anyone can argue with that!
Starshine, if I were you I would send out a letter about October so that you are giving 60 days notice letting the parents know that you will be asking them to resign contracts at a new rate on Jan. 1st, if that's the date you choose. Personally, I chose Nov. 1st because there is way too much going on for all of us on Jan. 1st!