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Are Family Child Care Providers Entitled to Unemployment Benefits?

March 26, 2020

Update! I’ve received new information about how this new law will impact family child care providers. Providers who voluntarily close or are losing income because of lower enrollment would appear to be eligible to receive unemployment benefits. This changes what I have written below. I will be writing a new article about unemployment benefits soon.

Yesterday the Senate passed a bill that offers extended unemployment benefits to millions of Americans. The House is expected to pass this bill on Friday.

Are family child care providers eligible to receive unemployment benefits under this bill?

Only under certain, narrow circumstances.

If your state government forces you to shut down your program:

You are eligible to receive federal unemployment benefits. The language in the bill says that self-employed individuals are eligible if their “place of employment is closed as a direct result of the COVID-19 public health emergency.”

If you voluntarily shut down your program:

You are not entitled to receive benefits unless you meet one of these criteria:

  • You have been diagnosed with the virus or are experiencing symptoms and are seeking a medical diagnosis

  • A member of your household has been diagnosed with the virus

  • You are providing care for a family member or household member who has been diagnosed with the virus

  • “A child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for the individual to work”

  • You have been advised by a health care provider to self-quarantine due to concerns related to the virus

If you believe you are eligible for unemployment benefits, contact your state unemployment office. Paid unemployment benefits begin if you are unemployed after January 27th and benefits continue until the end of the year. The maximum number of weeks you can claim unemployment benefits is 39 weeks. Each state sets its own rules about how much you can receive in unemployment benefits, however, this bill increases your state benefits by $600 a week.

Your state may offer family child care providers some state unemployment benefits or other direct benefits. Check with your governor’s office or your state representative.

Here are some questions that are raised by this bill. My answers are based on my best reading of what the bill says. It’s possible the federal government will issue clarifying guidance that change these answers. When I hear about any clarifications, I will post them on my website.

Question: What if my state government has requested that family child care programs close down? Am I entitled to unemployment benefits?

Answer: Not unless you meet one of the criteria above. That’s because it’s a request and you are not being required to shut down.

Question: What if I close my program to keep my own family safe as well as the child care families? Am I entitled to unemployment benefits?

Answer: No, unless you meet one of the criteria listed above.

Question: What if my state government has shut down all family child care providers except those who serve families who work for an essential service (such as health care workers)? Am I entitled to unemployment benefits?

Answer: This is tricky. If you choose to care for essential workers, you aren’t shut down and thus would not be eligible for unemployment benefits. If you are not able to find a family who is an essential worker, then you are effectively shut down. In this case you may qualify for unemployment benefits. If you are in this situation, I would recommend filing for unemployment benefits and see if you qualify. If you choose not to care for essential workers, then it’s not clear to me if you would be eligible for benefits.

Question: What if I am an incorporated provider (S or C Corporation) and have been treated as an employee? Am I entitled to unemployment benefits if I close my program?

Answer: I think the answer is yes, because you are being laid off from work, even if your program closes voluntarily.

Question: I have a school-age child of my own. Her school has closed and now she is at home with me while my business remains open. Am I entitled to unemployment benefits?

Answer: The bill says you would only be entitled to benefits if the school “is required for the individual to work.” So:

  • If you can’t run your child care program because your own child is now at home, you would be entitled to unemployment benefits.

  • If you are still caring for children, then you aren’t closed and aren’t entitled to these benefits.

  • If you terminate another family to enable you to care for your own child, you are still open and thus not entitled to benefits. I’m not sure under what circumstances you could argue that by caring for your own child you had to close your business.

Question: I had to lay off my employee because of low enrollment. Is my employee eligible for these unemployment benefits?

Answer: Yes.

Ordinarily self-employed family child care providers aren’t entitled to any unemployment benefits. That’s because they don’t pay into the unemployment fund. It is unfortunate that the vast majority of family child care providers will not receive any financial help through this new bill. The bill does create a cash payment plan of up to $1,200 per person and $500 per child that does include family child care providers. I’ll write about this tomorrow.

We are in uncharted territory and many family child care providers had hoped that this bill would offer some financial relief. I wish I could bring you better news. The federal government is likely to pass future legislation that might provide more help. Your state government may also be doing more to help you.

I know many providers have closed or have lost a significant number of their families due to this virus. It is a difficult financial time for many of you. I hope you can hang in there. The virus will pass.

What other questions do you have about unemployment benefits? I’ll be writing about other aspects of the bill in the days to come.

Tom Copeland – www.tomcopelandblog.com

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