Raising daycare rates?

Hi there, just a question. My daughter has been in daycare for 3 months now. Last week i daycare provider handed me a new contract. My daughter goes to daycare twice a week, and i pay $40 a day. The new contract stated that It will be going up to $45. I read my old contract i signed and there was a line that stated "daycare rates are in effect untill sept 2013" so im not sure what to make of all this. I find it not very prefessional having rates raised that much after 3 months. ?? any tips or comments would be helpful.

Since your contract gives a specific date it is effective until, then yes, the raise in rates does seem odd. I know many providers do raise rates in Jan but I personally only raise them for clients who have been here most of the year. But that is because clients I signed on 3 months ago would have been signed on at the 2013 rate anyway, simply because I don't think springing a new rate on clients so soon after starting care is wise or fair. Try asking your provider about it and point out that you understood the rates to be effective for a year. She may have forgotten she wrote that in but she really should abide by it.

Thank you very much :)

Yes, if your contract says your signed rate is in effect till Sept 2013, then that is the rate you pay till then. Also, I think the increase is to great. Given the economy and the competitive nature of our industry, I would have done this increase over at least two maybe three years. It depends on where you live of course, but still she shouldn't hit her clients with over an 11% increase. I have been charging the same rate for 3 years and I will increase my rates 2.5% in the new year.

Have you asked your provider about this? I enroll families and they stay at the rate they enroll with for the entire duration of their stay with me. I raise rates each year but ONLY for new clients. So if a family stayed with me for 5 years, their rate would be the same for 5 years. If they have a new child and that child comes to my daycare, the new child would be enrolled (and stay) at the whatever the rate is at the time of that child's enrollment.

I would ask your provider what is up since you have a signed contract stating specifically the duration of your current rate.

It's good to get the views of others on the rates. Keep in mind that we all do things differently and decide the amount and frequency of our own rate increases. You need to talk with your provider. Whether we think it is a big increase or appropriate or not is not relevant. If your contract states that your rate stays the same until Sept 2013, then you need to remind her of this point. If she disagrees then she is going against her own contract and you need to make the decision to either try to negotiate with her, pay the new rate, or look for care elsewhere.

Yes, your contract states your rates are effective until Sept 2013, so that is what my expectation would be. I agree also that the increase is unreasonable. To suddenly jump up by $5/day is a pretty substantial hit to anyone's budget. That adds up to another $100/mo which, in my mind, isn't peanuts. I go up typically $1/day once every year or so, depending on the financial climate and my needs. This was based on a fee schedule of a daycare centre who was floating infants to me so I felt it was a reasonable representation of daycare practices.

Also consider that you are part time and those kinds of spaces often do come with a premium rate. The provider is probably finding after three months that she is losing too much income by giving you the space. The space itself is worth $200 a week and you are paying only $80. The provider has asked you to pay an extra $10 to bring the rate up to $90 which is still less than half the income of the full time space. My part time rates are more than my daily rate to compensate for lost income, expenses not spread over the whole week such as putting aside for replacing playpens or printing newsletters, or birthday gifts to the child.

Having said that, the fact that your contract says rates in effect till 2013 then that should be honoured. There may also be a clause that allows the caregiver to ammend the contract by giving a certain amount of notice. She may also be raising the rates for her fulltime clients to $45 a day as well. If you truly feel that the increase is not what you are prepared to pay then you do have the option of looking for care elsewhere noting the timeframe of notice you need to give. What you might be able to do is under the circumstances acknowledge her need to be better compensated for the space but also for it to be phased in such as going from $80 a week now to $85 in January and then to $90 in February/March.

I would def bring this up to her, I would not sign the new contract and point out to her that when signing three months ago you agreed to the rates to stay in effect until sept 2013 and that is what is right. If the contract didn't state the rates to stay in effect until sept 2013 I would think it ok to raise the rates, although it seems so close to your sign on date, she may have had the plan to raise rates in the works long before you came, although even then, she should have given a heads up. but, def stress the contract of 2013 and stick to that. Good Luck

I have only raised my rates once in the last 9 plus years, but when I decided to raise my rates was when I realized I was lower than most other providers in the area and even the state was paying more than I was charging hourly. When I raised it went up 5$ per day, but because of the way I charge (which is a minimum due) most parents went up and average of 15$ a week. Not a single parent complained or made any sort of comment, as a matter of fact a few made comments to the effect of "It's about time!" ;)

This seems really wrong. When a provider and a client sign a contract that means both parties are bound by it. If your contract states rates are in effect until Sept. 2013 then that is the way it should be and you could actually geta lawyer to send her a letter stating she must abide by the legal contract. I'm sure a judge would enforce it in court.

However, that is not a good relationship between a childcare provider and a client, not very businesslike and I agree it's a steep price hike. If you end up with hard feelings between you that won't be good for your child at all. Talk about it with the caregiver and if you have to give your notice and get a new daycare that might be necessary.