Covid-19 daycare contract: what to include and why it still matters

Last updated 2026-07-09

Why does a covid-19 clause in a daycare contract still matter?

The federal COVID-19 public health emergency ended May 11, 2023. A lot of providers quietly deleted their pandemic language and moved on. That's a mistake.

The legal exposure didn't end with the emergency. Families charged tuition during closures in 2020 and 2021 are still fighting contract disputes in small claims courts. Judges look at one thing above all: was the contract's language specific enough to let the provider keep fees during a government-ordered shutdown? Vague force majeure boilerplate rarely holds up when a judge asks the provider to point to the exact clause. ^[1]

Covid isn't gone either. SARS-CoV-2 is endemic, variants keep coming, and a child testing positive still triggers exclusion under most state licensing rules. Your contract has to tell families exactly how that works: how long the child stays home, what documentation you require before readmission, and whether tuition is due during the absence.

The rules changed permanently, too. Many states rewrote their child care licensing codes in 2021 and 2022 to require written communicable disease policies and written tuition-hold policies. Not having them in writing is now a citable deficiency in inspections. That deficiency didn't exist before 2020. ^[2]

So the real question isn't whether to keep pandemic-era language. It's how to write it so it holds up and stays fair.

What happened to daycare contracts during the pandemic?

More than half of child care providers temporarily closed between February and April 2020, according to Child Care Aware of America. ^[3] That created an instant contract crisis. Providers still owed rent, staff wages, and insurance, but most had no language authorizing them to charge families who weren't getting care.

The fallout sorted into three groups.

Providers with no written contract, or contracts that said payment was "for care provided," had almost no footing to collect during closure. Many refunded under pressure or wrote off months of revenue.

Providers whose contracts included a tuition-hold or enrollment-fee clause that explicitly survived closure held a much stronger position, though some still ate chargebacks and disputes.

Providers who communicated clearly in writing, fast, and offered a concession (a partial credit, a makeup day, a flexible payment plan) mostly kept their families and stayed out of court. That wasn't only good PR. Courts and arbitrators treated documented communication as evidence of good faith.

The lesson is blunt. The providers who survived financially wrote clear policies before the crisis. The ones scrambling to write them after didn't fare as well. ^[3]

Median weekly full-time center rates ran roughly $200 to $400 per child depending on age and state, per Child Care Aware. That means a two-week closure dispute could involve $400 to $800 per family. See the full daycare cost picture for context. That's real money worth a clear contract.

What should a covid-19 daycare contract clause actually say?

Five components hold up in disputes. You don't need legal jargon. You need plain language that leaves no room to argue about what was agreed.

1. Illness exclusion criteria Name the symptoms that require a child to leave or stay home: fever at or above 100.4°F, new or worsening cough, vomiting, diarrhea, or a positive covid-19 test. Don't write "sick child." That's too vague. Write "a positive COVID-19 test result, whether antigen or PCR." ^[2]

2. Return-to-care requirements CDC guidance for community settings says a person with covid-19 may return when they've been fever-free for 24 hours without fever-reducing medication and their symptoms are improving. ^[4] Put those exact conditions in your contract, then add: "Provider reserves the right to require documentation from a healthcare provider before readmission." That second sentence is the one that protects you.

3. Tuition during illness-related absence This is where most disputes start. Two defensible approaches: (a) tuition is due regardless of attendance, with no makeup days for illness absences, or (b) tuition is due, but you offer a set number of sick-day credits per year (five is common). Pick one and write it plainly. "No refunds for sick days" isn't enough on its own. Say what sick days cover: "including any absence required by the provider's communicable disease policy."

4. Tuition during provider-initiated closure This is the covid-specific piece most pre-2020 contracts missed. Write: "In the event Provider closes for reasons outside Provider's control, including but not limited to a communicable disease outbreak, government order, or public health directive, tuition holds are due in full. Provider will make commercially reasonable efforts to offer makeup days or account credits within [X] days of reopening." The phrase "outside Provider's control" matters because it tracks the force majeure logic courts have used. ^[1]

5. Liability limitation State plainly that the provider isn't liable for a child or family member contracting an illness while in care, to the extent state law allows. Most state licensing statutes bar providers from limiting liability for their own negligence, so include: "This limitation does not apply to Provider's gross negligence or willful misconduct." Skip that carve-out and some courts will void the whole clause.

What do state licensing regulations require in your illness policy?

Licensing requirements vary by state, but the direction since 2021 has been consistent: more required detail, in writing. ^[2]

The Child Care and Development Fund rules administered by the Office of Child Care require states to set health and safety standards for providers receiving CCDF subsidy funding, including standards for "prevention and control of infectious diseases (including immunization)." ^[5] Each state turns that federal mandate into its own licensing code.

Here's a sample of what states added or strengthened after 2020.

State	Key post-2020 illness policy requirement	Source
California	Written communicable disease policy required; exclusion criteria must be provided to parents at enrollment	Title 22, CCR §101226 [7]
Texas	Written illness policy must address exclusion criteria, readmission criteria, and parent notification	26 TAC §746.3603 [8]
Florida	Providers must have a written communicable disease policy and distribute it to families	Fla. Admin. Code 65C-22 [10]
Colorado	Licensed facilities must have a written sick child policy with specific exclusion criteria	7 CCR 703-11 [11]

Safest approach: pull your state's current licensing rules (search "[your state] child care licensing communicable disease policy"), copy the exact symptom list they require, and paste it into your contract. Your contract has to meet the state standard at minimum. It can exceed it. It can't undercut it. ^[2]

Not sure where your state's rules live? The National Center on Early Childhood Quality Assurance keeps state profiles at the Office of Child Care site. ^[5]

How do tuition hold clauses work and are they enforceable?

A tuition hold clause says your slot costs money whether or not the child attends, because you're holding that slot and paying fixed costs regardless. Courts have generally upheld these clauses when the language is specific and families signed knowingly before the closure. ^[1]

Enforceability comes down to four factors.

Conspicuousness. Bury the clause in paragraph 14 of 16 and a court is more likely to find it wasn't meaningfully disclosed. Put it in bold or a separate initialed section. Some providers use a one-page addendum just for illness and closure payment terms.

Specificity. "Payments are non-refundable" is not the same as "Tuition is due in full during any closure required by a public health order or communicable disease outbreak." The second survives a dispute. The first usually doesn't, because a judge reads "non-refundable" as covering the family's choice to withdraw, not the provider's choice to close.

Consideration. The family has to get something in exchange for paying during closure. "We are holding your child's spot and continuing to pay our staff and facility costs" is adequate consideration. Say it in the contract.

Mutual assent after disclosure. Get a dated signature. If you update the contract to add covid language, get a fresh dated signature. An undated addendum handed to parents mid-enrollment without a signature is nearly worthless in a dispute. ^[1]

One more thing for home daycare insurance: your liability policy almost certainly excludes communicable disease claims. Read your contract's liability clause alongside the policy, not instead of it.

What should the makeup day and credit policy say?

Makeup day policies are where providers get burned trying to be nice. "We'll make it up somehow" is not a policy.

Write the terms as a fixed formula:

"In the event of a Provider-initiated closure lasting more than [X] consecutive days, Provider will issue account credits equal to the prorated daily tuition rate for each closure day beyond [X] days. Credits will be applied to future tuition invoices within ^[90] days of reopening. Credits are non-transferable and have no cash value."

The threshold (how many days trigger credits) is a business decision. Most providers use two to three days for illness-related closure. During the pandemic, providers who survived financially tended to offer credits for closures beyond two weeks, not shorter ones.

For child-initiated absences (the child tests positive and can't come), the standard is no credit. You're holding the slot. Say that plainly, not by implication.

Avoid one trap: promising makeup days that need the child to attend outside their normal schedule. If a child comes Monday through Wednesday and you promise a Thursday makeup, you may have to staff differently. Write the credit in dollars, not days of care, and let the family apply it at their normal rate.

Does your daycare contract need a separate covid-19 addendum or can you update the main contract?

Either approach works legally. They carry different practical risks.

Updating the main contract means families sign a new version. That's clean: one document, one signature, no argument about which version governs. The downside is that families used to the old version may push back or ask questions, which is fine. Answer the questions. That conversation is the disclosure that makes the clause enforceable.

A separate addendum deploys faster and updates annually without reissuing the full contract. The risk is that families forget they signed it or claim they didn't. Fix that by attaching the addendum physically to the main contract and adding one line to the main contract: "The Illness and Closure Policy Addendum attached hereto is incorporated by reference and made part of this agreement."

Using a contract management tool? Date-stamp the addendum signature separately from the main contract signature. Then you have clear evidence of when each piece was agreed to.

For the bigger picture on running a licensed program, the ChildCareComp compliance toolkit has editable contract templates that already include illness and closure language, checked against current state licensing standards.

What about CCDF subsidy families? Are there different rules?

Yes, and this matters more than most providers realize.

The Child Care and Development Fund rules at 45 CFR Part 98 set minimum standards for payment policies in subsidy programs. One of the most consequential rules, finalized in the 2024 CCDF final rule, addresses payment during closures. Under it, state CCDF agencies must pay providers for scheduled days of care even during brief closures (with limits), and providers generally can't charge subsidy families out-of-pocket fees above their normal copayment for days the state has paid. ^[5]

The Administration for Children and Families states: "Lead agencies must pay child care providers based on enrollment rather than attendance unless attendance-based payment is allowed by an exemption." ^[6] That's a direct quote from ACF's CCDF policy guidance, and it's why many states shifted to enrollment-based payment systems that held up through the pandemic better than attendance-based ones.

What this means for your contract: you can't charge a CCDF subsidy family a tuition hold fee during a state-ordered closure if the state subsidy system already pays you for those days. Charging both is a contract violation and possibly a fraud issue. Write a separate policy section for subsidy families that names the state payment system and caps the family's obligation at their standard copay. ^[5]

If your state moved to enrollment-based subsidy payments after 2020 (most did), your CCDF families' closure payment terms are largely governed by the state agency's contract with you, not your family contract. Review both.

What are the biggest contract mistakes providers made during covid-19?

These patterns showed up over and over in small claims disputes and licensing complaints during 2020 and 2021.

Charging families during closure with no contract basis. The most common one. The contract said nothing about closures, the family disputed the charge, and the provider had no document to point to. In most states, without a written agreement authorizing the charge, the provider couldn't collect. ^[1]

Issuing credits by text message. A text saying "I'll give you a free week when we reopen" is a contract modification. It can override a clear tuition-hold clause. Get any concession in writing, clearly labeled as a one-time accommodation that doesn't change the underlying terms.

Referencing pre-2020 illness policies. Some providers had contracts pointing to a separate "illness policy" document they hadn't touched since 2015. That old document said nothing about respiratory illness, covid, or PCR tests. When a dispute hit, the illness policy was part of the contract, and it contradicted what the provider actually did in 2020.

Not updating contracts annually. State licensing requirements change. If your contract says "Provider will comply with all applicable state licensing requirements," a change in your state's exclusion rules becomes part of your contract automatically. Fine if you follow the new rules. A problem if you don't.

Forgetting to address remote care. Some providers offered Zoom story times or activity kits during closure. Whether that counts as "care" for tuition purposes is a genuine legal question. If you offer anything during a closure, your contract should say whether it affects payment, and the answer should be explicit.

How do you communicate contract changes to families without losing them?

The communication matters at least as much as the language. A technically correct contract delivered badly generates disputes almost as often as a bad contract.

Lead with the benefit to the family. "This policy protects your enrollment slot and lets us keep our staff" persuades better than "this is our legal tuition hold policy." Both are true. The first framing starts fewer arguments.

Give families at least 30 days' notice before a new or updated illness policy takes effect, except in real emergencies. That's more than good practice. Some states require written notice before changing enrollment terms, especially for subsidy families. ^[2]

Offer a short Q&A meeting or a written FAQ that hits the predictable objections. "What if my child is excluded for a suspected case that turns out negative?" Answer: your return-to-care criteria hinge on symptom resolution, not the test result, so a negative test alone doesn't mean instant readmission. "What if the state orders you to close?" Answer: the tuition hold applies, and here's what makeup credits look like.

Document the communication. Keep signed contracts, dated addenda, and every email or text where you explained the policy. If a dispute surfaces six months later, your documentation is your defense.

Clear policies help with part-time families, too. People weighing part time daycare often worry about paying for days a child can't attend. A clear illness credit policy makes part-time enrollment more attractive, not less.

What should you do if you haven't updated your contract since 2019?

Do it now. Not because covid is guaranteed to force another wave of closures, but because your state's licensing requirements have almost certainly changed since 2019 and your contract probably doesn't reflect them. ^[2]

Start with your state's current licensing regulations. Find the section on communicable disease and illness policy. Copy the exclusion criteria your state requires, word for word. Put them in your contract.

Add the closure payment clause from the section above. Make it specific: what triggers it, what families owe, what credits apply.

Then get new signatures. Don't assume old signatures cover new terms. Email the updated contract, ask for a reply confirming receipt, and require a signed copy back within 10 to 14 days. Keep the signed copies somewhere you can actually find them.

Check your daycare liability insurance at the same time. Most general liability policies exclude communicable disease claims, though some insurers added pandemic endorsements after 2020. Know what your policy covers and what it doesn't. Your contract's liability limitation is a backup, not a substitute for insurance.

Put a calendar reminder to review the contract and your state's licensing rules every January. Licensing rules update on their own schedule. An annual review takes an hour and keeps your contract from citing rules your state repealed two years ago.

The ChildCareComp compliance toolkit has a state-by-state illness policy checklist that flags the exact regulatory sections your contract language needs to match.

Frequently asked questions

Can a daycare charge full tuition when it closed during covid-19?

Yes, if the contract specifically authorized it. Courts have upheld tuition-hold clauses during COVID-19 closures when the contract clearly stated tuition was due regardless of whether care was provided, including during closures outside the provider's control. Providers without that specific language generally could not collect. The key is explicit written terms, signed before the closure period.

What symptoms should a daycare covid exclusion policy list?

At minimum: fever of 100.4°F or higher, new or worsening cough, shortness of breath, vomiting, diarrhea, and a positive COVID-19 test (antigen or PCR). Check your state's current licensing rules, because many mandate a symptom list that must appear in your written illness policy. Matching the state's language exactly protects you in both a licensing inspection and a family dispute.

When can a child return to daycare after testing positive for covid-19?

Current CDC guidance for community settings allows return when the child has been fever-free for 24 hours without fever-reducing medication and symptoms are improving. Your contract and written illness policy should restate these criteria so families know what to expect. You can also require documentation from a healthcare provider before readmission; include that option explicitly in your written policy.

Does a force majeure clause cover daycare closures due to covid-19?

It depends on the language. Generic force majeure clauses often list events like war or natural disaster and never mention pandemics or public health orders. Courts interpreting pandemic-era child care disputes have been inconsistent on whether standard force majeure language covers COVID-19 closures. Specific wording naming communicable disease outbreaks and public health orders is far more reliable.

Do daycare covid-19 contract rules apply to home daycares the same as centers?

Yes. Home daycare providers are licensed under the same state frameworks and face the same contract law principles. The rules requiring written communicable disease and illness policies apply to both home and center settings in nearly every state. Home providers often have fewer families and closer relationships, which can make disputes more personal, so clear written terms matter even more.

Can a daycare contract limit liability for a child catching covid-19?

A contract can limit liability for ordinary negligence, but not for gross negligence or willful misconduct in most states. Include a liability limitation clause that explicitly carves out gross negligence. Even so, your primary protection is following your state's licensing health and safety rules, because compliance is evidence against a negligence claim while non-compliance is evidence for one.

What is an enrollment-based vs attendance-based payment model for daycares?

Enrollment-based payment means families (and subsidy agencies) pay for the reserved slot regardless of how many days the child attends. Attendance-based payment charges only for days present. COVID-19 pushed most states toward enrollment-based models for CCDF subsidy payments because it stabilized provider revenue. ACF's CCDF guidance now requires most states to pay providers based on enrollment rather than attendance.

What should a daycare contract say about makeup days for pandemic closures?

Specify a threshold (for example, closures beyond three consecutive days) that triggers credits. State the credit formula (prorated daily rate per closure day beyond the threshold). Set a deadline for using credits (for example, 90 days after reopening). Limit credits to dollar value, not specific days of care. Make clear that illness-related absences for an enrolled child generate no makeup days or credits.

Are daycare providers required to have a written covid-19 policy?

Not by name anymore, but most states now require a written communicable disease policy and written illness exclusion criteria as part of licensing. Those requirements cover COVID-19 alongside other communicable diseases. CCDF rules at 45 CFR Part 98 require states to set health and safety standards for licensed providers receiving subsidy funding, including infectious disease prevention and control.

What should a daycare do if a state subsidy agency paid for a closure period but the provider also charged families?

Stop immediately and correct it. Charging a family a tuition hold while also collecting a state subsidy payment for the same days is almost certainly a contract violation with the subsidy agency, and depending on the state, it may be fraud. Review your state agency contract and your family contract. You generally cannot collect more from a CCDF family than their standard copayment for any period the agency has paid.

How often should a daycare update its covid-19 contract language?

Review it annually at minimum. State licensing rules change, CDC guidance has been updated multiple times since 2020, and CCDF rules were substantially revised in the 2024 final rule. A January review against your state's current licensing text takes under an hour. Get new signatures any time you change payment terms, exclusion criteria, or liability language.

Can a daycare require covid-19 vaccination as a condition of enrollment?

Policies vary by state. Some states explicitly bar daycare providers from requiring vaccines not on the state's mandated immunization schedule as a condition of enrollment. Others leave it to provider discretion. COVID-19 vaccination for children is not universally mandated by states as of 2025. Check your state's immunization requirements for child care and consult your licensor before adding a vaccination requirement.

What records should a daycare keep related to its covid-19 contract policies?

Keep signed contracts and dated addenda for at least three years, or longer if your state's records retention rules require it. Keep copies of any policy updates sent to families, documented by date. Keep records of any closure periods, the government orders or public health directives that triggered them, and any credits or accommodations you offered. These records are your defense in a licensing inspection or a family dispute.

Does the end of the federal public health emergency mean daycares no longer need covid-19 contract clauses?

No. The end of the emergency on May 11, 2023 ended certain federal flexibilities and funding streams, but it didn't change your state's licensing requirements for written illness policies, and it didn't eliminate the risk of disputes over past or future closures. COVID-19 is now endemic, positive cases still trigger exclusion under most state rules, and clear contract terms remain your best protection against tuition disputes.

Sources

1. National Consumer Law Center: Force Majeure and COVID-19 consumer guidance: Courts have been inconsistent in applying generic force majeure clauses to COVID-19 closures; specific language naming communicable disease outbreaks is more enforceable
2. National Center on Early Childhood Quality Assurance, Office of Child Care: State Licensing Requirements: Most states updated child care licensing rules after 2020 to require written communicable disease policies and specific illness exclusion criteria
3. Child Care Aware of America: 2020 Child Care in State Fact Sheets: More than 50 percent of child care providers temporarily closed between February and April 2020; median weekly full-time center rates range from roughly $200 to $400 depending on age and state
4. CDC: Respiratory Virus Guidance: CDC guidance allows return to community settings after COVID-19 when fever-free for 24 hours without fever-reducing medication and symptoms are improving
5. Office of Child Care, ACF: Child Care and Development Fund Final Rule (45 CFR Part 98): CCDF rules require states to have health and safety standards covering infectious disease prevention and require enrollment-based payment by lead agencies unless an exemption applies
6. Administration for Children and Families, ACF: CCDF Policy Guidance: ACF stated: 'Lead agencies must pay child care providers based on enrollment rather than attendance unless attendance-based payment is allowed by an exemption'
7. California Department of Social Services: California Code of Regulations Title 22, Child Care Center Licensing (§101226): California requires a written communicable disease policy with exclusion criteria provided to parents at enrollment
8. Texas Health and Human Services: Texas Administrative Code 26 TAC §746.3603, Minimum Standards for Child-Care Centers: Texas requires a written illness policy addressing exclusion criteria, readmission criteria, and parent notification
9. Florida Department of Children and Families: Florida Administrative Code 65C-22: Florida requires providers to have a written communicable disease policy and distribute it to families
10. Colorado Department of Early Childhood: 7 CCR 703-11 Child Care Center Rules: Colorado requires licensed facilities to have a written sick child policy with specific exclusion criteria
11. Child Care Aware of America: The US and the High Price of Child Care, 2022 Report: Annual child care costs range from approximately $10,000 to $22,000 per child depending on state and care type, making tuition disputes financially significant