Late Payment Policy

My original contract stated that I would terminate if I was paid late. I have decided to change this to instead charge a fee per day for late payment and reserve the right to terminate if a client is late with a payment.
My late payment fee is high - it's the equivalent of one day of fees. I have one client (the one who Often pays me late) who is hesitant about signing and suggested that what I am enforcing is illegal. He said something about how the interest per day can only be a certain amount. I am wondering if anyone else has any knowledge about a law like this?
I have researched his concern and have not found evidence to support his claim.
My gut is telling me not to trust this guy (there were a couple of other issues before this) and I am very close to asking him to find another provider. The most issue was that he brought his child into my house 10 minutes before I opened, slipped on my freshly mopped floor and said something like, "I sure hope that heals." It made me kind of nervous that he might be the kind of person to sue me.
Anyway, the slipping isn't the issue but I wanted to give a bit of background about why this guy's argument makes me nervous.
I really love having his child here and I would like to continue to continue to offer my services to this family.

A client talking legalities would make me nervous too...especially with the slipping incident. Hope someone has an answer for you.

IMO you can charge whatever you want for a late fee. It isn't a loan and you are an independent business. I do think your charge is high, but if he signed your contract and therefore he is bound by your policies.
As far as slipping on your floor, I firstly would not have the door unlocked for a client to come in early, but if you do, I would post a sign on your door stating the floor is wet and for them to be cautious.
Lastly, I don't like clients who give threats, no matter if presented in a joking or veiled manner. Watch this guy.

Thanks for the feedback. I hope i find an answer too and that thi queasiness in my stomach goes away. Mimi - he signed the original contract stating that I reserve the right to terminate if a client is late with a scheduled payment. The late payment fee is a new addition to my contract.
All of my other clients signed it without issue - they also pay me on time.
The worst case scenario is that I could always give him the option of adhering to the terms of the original contract and I could terminate the next time he is late with a payment.

What I have in my contract is a 25$ late payment fee ( flat rate, not per day). After two late payments they are terminated. There is nothing worse than running around for your paycheck all the time. No one else with a regular job would find this acceptable. Why should we? I had a client like this and every week it was " oops, I forgot the check for today is it ok if I bring it monday?" Ugh. I used to be laid back about it but then it became a weekly thing. I am so glad they are gone.

Thanks, Fun. Have you had to enforce it and terminate?

Leave it the way it is and the next time he is late hand him a term notice.... Or better yet say goodbye now cause yes he is the type to sue you. Also keep your door locked till opening time and not a minute before.

I would feel SUPER uncomfortable having a client who questioned the legalities of anything I had.... the slipping on the floor comment would have had me generating a term letter ASAP....

People who sue others are the only ones who immediately think to make comments like that. If I had slipped, I certainly would not have made that comment. (???)

As far as late fees go, I have a 1,2 3 policy. My late fee is $25 per calendar day. The 3rd time the family is late, they are termed. I have a hard time working with a family who has such little respect for me and my business and paying late is totally disrespectful.

I agree with crayola... Leave his the way it is and term him next time it happens. I'd hope it's soon, honestly he sounds like trouble to me.

First door stays locked till you are "open" at which point the floor is dry, the sharp things and cleaners are up and you are ready to receive kids. If he has to stand on porch till then too bad - remind him at least he didn't slip.

I think I know what he is referring to but not sure exactly what it applies to. There are limits that can be charged on loans - to prevent people from profiting on the backs of the less fortunate. No more charging outrages percentages and the limits are pretty much what the banks charge. Doubt this applies to fees as there is the option available to not incur the fees by not breaching the rules of the contract. I would probably just through that kind of a comment back at him saying well if you don't want to pay the fees then don't commit the crime.

Until he signs the new contract or you terminate the old one, then the old one stays in effect. So it sounds like if he doesn't sign the new one with the option of paying extra to stay if he pays late he is electing to be terminated if he pays late so your choice is to follow through and let him go.

Then if he comes grovelling back decide how you want to proceed. He sounds like he thinks he controls the world and maybe he does where he works but he needs to know he doesn't in the rest of life.

This guy is big-time trouble. Previously paying late is strike number one. The comment he made after he slipped on the floor was strike number two. Questioning your new late payment fee and the "legalities" of it, is strike number three. I would turf his behind before he can screw you over, because he most certainly will.

And for the record, what he is referring to is interest accrual. It does not apply here. You are not charging him an interest percentage per day, or interest for the benefit of a loan, etc. You are charging him a penalty fee for being late with his daycare service payment. It's a PENALTY as a consequence of doing something he knew he shouldn't do, and chose to do anyway. He can avoid having to pay the penalty, not by attempting to hide behind a (non-existent in this case) law, but by NOT PAYING HIS DAMN DAYCARE FEES LATE.

I understand you like his kid, and maybe you need the income from them, and filling spots may not be so easy in your area? I can empathize. But mark my words. This will not end well, and if it's not you who terms, it will be you who gets burned.

Term them. Do it today. This guy is going to make your life very difficult. I don't care if I was down to one child. I would term.

I agree with everyone else that this guy sounds like trouble. I have a termination for non-payment (which I have done) and huge fees for NSF cheques but I do not have a late fee. I do however require all my parents to hand me post-dated cheques every three months. I am normally handing out a newsletter based on the season every three months and put a reminder in for cheques. I send an email reminder the week before. If they are more than two days late, I require the next batch to be for six months or until the end of their contract. It has worked so far :)

Can't believe I am back on here posting about this guy (well actually, yes I can), but here goes. Earlier this week there was an incident where I asked him how his first day back at work was after the holidays and he replied, "good - some of us like our jobs." I had to pick my jaw up off of the ground after that.

Next, I had to close early for an appointment and he came rushing in 2 minutes after my closing time (happens 50% of the time when he picks the child up), was not apologetic and became very defensive and tried to shrug it off when I said that I really need him to be here to pick his child up on time, especially that day when I had a scheduled appointment that I had to get to on time. He said, "well, it's X:01." As my husband said, you can't rush into the grocery store 1 minute after it closes - that's why we have closing times. We all know that it takes a good three-four minutes to get the child dressed to go outside and then another few minutes before the child is in the carseat and out of the driveway. More than that though is that I really feel a lack of respect going on here and that he thinks that his time is more valuable than mine. Makes me so mad!!
Do you consider 1-3 minutes after your closing time to be a late pick up?

Yep that is a late pickup! I would charge for it. Also wondering if he is constantly late picking up why he is still there?

Yes, I have charged it to a family that was having issues with arriving on time. It have become a non-issue now because I did it.

My sister was accidently late picking up her kids from her daycare center on new years eve because she didn't notice the sign saying they were closing early. So she had to pay $60 for being 15 minutes late - ouch! Be sure she will make sure they are never picked up late again and she will take the time to read the signs! They charge $2 per minute per child - I think I need to raise my late arrival fee! Lol!

well I cant believe your still putting up with him ..... he sounds like the dad of the family I term a year ago....he had a problem with my holidays and he made a comment like "I work for the government and I get 4 weeks holiday and your just here and you want three weeks? and he waved his hand to signify my playroom when he said "your just here" I handed him a term notice the next day .....he had absolutely no respect for what I did and he had made other disparaging comments prior to that and that was the final straw.....this type of person thinks you are beneath him and he is proving that to you by being just a few minutes late .....if I was closing to go to an appt and this was prearranged I would expect parents to be there 5 mins early in order to get the child dressed and out the door, however when this parent was not there at 5 mins to closing time I would have dressed the child and be standing on the door step with my vehicle running so that when they pulled up you hand the kid off and say "you a few mins late I need to get to my appt" .....this guy is passive aggressive and I would show him the door

I don't have a late fee but I don't accept their child back until payment is paid. I ask that payment is here in the mornings but sometimes a parent forgets the cheque or mom wrote the cheque and dad didn't bring it so there are times I don't get paid until the end of the day, but that's not a big issue to me unless it's done repeatedly. I don't go to the bank until the evening or the next day anyways.

If you have it in your contract that the late fee is "x" and the parent doesn't want to agree to that, then I would say "I'm sorry but all families have to agree to my contract and if they choose not too, than alternate care is needed. Would you like to give your notice now?"

As for 1-3 minutes late, no I likely wouldn't charge my late fee which is $10 for the first 15 minutes unless it happened often. The times that the parents have been late, it's been a noticeable time and I've charged but I would likely give a 5 mins grace period. If I needed to be out the door right away I would have the child dressed and ready to go ASAP though!

i know, i know... my partner and i are planning another baby ( i actually just had a miscarriage a few weeks ago) and I thought I would be closing end of June at the latest so was hopign to just kind of coast through the next few months without having to find a new family.

AmandaKDT - so would you charge your late fee to someone arriving 1-2 minutes after your closing time? The thing with this guy is that he is late at least half of the time he picks the child up and isn't the least bit apologetic about it.. combined with his other behaviours, i am just fed up!

Crayola: I cant believe I'm still putting up with him either! That guy you were dealing with sounds very similar... I'm really hoping to just coast along with the same families that I have now until I become pregnant again and pick a closing date for my daycare.

To be honest, I personally think that charging a late fee would not make him pick up on time in future as he has no respect for you, and more than likely it will aggravate him more resulting in him being more awful towards you. Terminate this family for goodness sake. This isn't about you it is about him and we can not do anything to change how a person is, especially an adult and especially someone who keeps repeatedly disrespecting you. After all your best efforts this guy is still simply awful and deserves no more of your time

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Originally Posted by gravy_train

Crayola: I cant believe I'm still putting up with him either! That guy you were dealing with sounds very similar... I'm really hoping to just coast along with the same families that I have now until I become pregnant again and pick a closing date for my daycare.

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I know what you mean ...sometimes its easier to just put up with it then interview for a new family and have to break in a new kid.....why don't you try changing your hours by closing 15 mins earlier and then if he is a few minutes late then who cares ......if he is always your last pick up then just change your hours for him but don't tell him its just for him ...make a letter saying dear parents effective jan xx 2014 my closing time will change to 5:15 (or whatever 15 mins earlier is) in order to accommodate my family obligations. thank you for your understanding....... .I used to be open till 530 and I hated it ...so as the later families left I kept backing up my close time till I got it where I wanted it.

I agree with the other posters. This guy does not respect you and never will. He has insulted you in so many ways! Please put yourself first in this situation. Get rid of this guy and the negativity he brings into your life. You need to think about your health first. Only allow people into your life and home who bring friendship, peace, and positivity. The extra money is not worth it if you have to deal with this "man" every day.