WWYD...Ethical Question...Pls Give Advice

[frugalmama4]

Hi,

Ok, so I have a friend "another provider"that mention something she plans to due that I just thinks is un-ethical.

Long store short-I had a previous client refer a mbr of her family to me for child care; at the time I could not take the kid...so I refer her to my provider friend and she took them.
Back story-I do not have a personal or business relationship with the referred parent...but do with the referring parent. Now the the "referred parent" is able to receive state assistance "provider friend" will accept it under this conditions. No tax statement given, parent has to pay difference between state pay and providers rates. When provider mention this I said it wasn't right...but she didn't seem to care and would still set it up like this. I feel I should call my previous client...shoot the breeze with her and just see if something comes up about this...if so I would in so many words say "That's wrong"

What do you think?

What would you do?

Thanks

[bunnyslippers]

I personally would stay out of it. It certainly does sound unethical...but why add drama to your life? If your provider friend is not being ethical, I am not sure it is your concern. I don't think ethics are something that can be policed, but rather are personal. As long as you aren't doing something unethical, I think it isn't your issue to handle. It will probably just stir up problems and hard feelings...

[Blackcat31]

Hi,

Ok, so I have a friend "another provider"that mention something she plans to due that I just thinks is un-ethical.

Long store short-I had a previous client refer a mbr of her family to me for child care; at the time I could not take the kid...so I refer her to my provider friend and she took them.
Back story-I do not have a personal or business relationship with the referred parent...but do with the referring parent. Now the the "referred parent" is able to receive state assistance "provider friend" will accept it under this conditions. No tax statement given, parent has to pay difference between state pay and providers rates. When provider mention this I said it wasn't right...but she didn't seem to care and would still set it up like this. I feel I should call my previous client...shoot the breeze with her and just see if something comes up about this...if so I would in so many words say "That's wrong"

What do you think?

What would you do?

Thanks

The provider can't accept state pay under the table. Even if she thinks she is doing it that way, the state is reporting the money paid to her.

Parents don't need a tax statement from the provider to claim their child care expenses so even if the provider is not willing to provide a tax statement (she isn't even required to do so by law) the parent can still claim their expenses.

[lovemykidstoo]

Blackcat that's always been my understanding of it too. I have never had state assistance parents, so I can't speak 100%, but I don't think there is any way possible if the gov't is paying you to do it under the table. I'm pretty sure that the gov't will have record of that. Or are you talking about the part where the family is paying the difference between what she charges and what the state pays? For instance if she charges $25 a day and the state pays $20 a day, the parent pays an extra $5.00. Are you saying that she is doing that portion under the table? All the parent has to do is keep her receipts to what she is paying and the provider will get in trouble for not claiming the income.

[LaLa1923]

I'd stay out of it. The parent can still claim the child care on their taxes. I don't see anything wrong with charging the difference.

[bunnyslippers]

I personally would stay out of it. It certainly does sound unethical...but why add drama to your life? If your provider friend is not being ethical, I am not sure it is your concern. I don't think ethics are something that can be policed, but rather are personal. As long as you aren't doing something unethical, I think it isn't your issue to handle. It will probably just stir up problems and hard feelings...

[frugalmama4]

Blackcat that's always been my understanding of it too. I have never had state assistance parents, so I can't speak 100%, but I don't think there is any way possible if the gov't is paying you to do it under the table. I'm pretty sure that the gov't will have record of that. Or are you talking about the part where the family is paying the difference between what she charges and what the state pays? For instance if she charges $25 a day and the state pays $20 a day, the parent pays an extra $5.00. Are you saying that she is doing that portion under the table? All the parent has to do is keep her receipts to what she is paying and the provider will get in trouble for not claiming the income.

Yea, the state pay will be reported by the government so provider has to claim as income... but the difference between what the state says the parent has to pay "parent fee" and what the provider actually charges...the provider wants the parent to pay out of pocket and will not give her a tax statement.

I know the parent can still claim the expense without the statement, however this provider only takes cash and does not give receipts. I agree this is not my job to inform an un-informed parent on how to take care of business...but I hate people trying to get over on other people.

This really ****s!

Thanks

[cheerfuldom]

I would stay out of it. I certainly wouldnt get someone like the previous client involved (who is not the DCP in this scenario). The provider told you something private about a current daycare parent, I would think that it would be unethical to discuss the DCPs personal financial matters with their relative/your previous client. If you feel that there is some breech with licensing regulations, you could always report that anonymously.

[frugalmama4]

I'd stay out of it. The parent can still claim the child care on their taxes. I don't see anything wrong with charging the difference.

Here in my State if you agree to accept the state program...then your're agreeing to the pay scale they have in place and can not charge the parents out side of that. Even the parent fee is based on the parents allowable income per-state guidelines.

I guest I feel so strongly about this too because I once receive state funds to help pay for childcare and what have been very upset if my daycare would have charge me extra just because the state didn't pay their full rates for my kid.

Thanks

[daycarediva]

Here it is typical to charge the difference (pd days off as well)

The provider has to be given a check from the state, they will keep track of that.

It is quite illegal to not claim the difference, BUT that isn't harming kids or going over ratio, or anything like that so I wouldn't say/do anything.

My dh occassionally does jobs for free/barters work. He did a bathroom fixture install for a friend of a friend, and then the friend did our drywall in our basement. The drywall job ended up being MUCH larger/time consuming compared to the bathroom, so we ended up paying him. He isn't claiming the income. That isn't my problem, I can still write it off because I have the receipt. Yes, it might be unethical, but it isn't something I would stick my nose in.

[daycarediva]

Here in my State if you agree to accept the state program...then your're agreeing to the pay scale they have in place and can not charge the parents out side of that. Even the parent fee is based on the parents allowable income per-state guidelines.

I guest I feel so strongly about this too because I once receive state funds to help pay for childcare and what have been very upset if my daycare would have charge me extra just because the state didn't pay their full rates for my kid.

Thanks

On the other hand, why is it fair for me to accept less for one child over another? I don't do the full amount of work/care for both?

In my state, parents sometimes have a co-pay (state pays max 125, provider charges 150, parent has a $25 copay). I no longer accept state pay, but if I did, I would add it back into my handbook that parents are required to pay the difference, including paid time off, when kids or provider are out sick, etc.

[Blackcat31]

Yea, the state pay will be reported by the government so provider has to claim as income... but the difference between what the state says the parent has to pay "parent fee" and what the provider actually charges...the provider wants the parent to pay out of pocket and will not give her a tax statement.

I know the parent can still claim the expense without the statement, however this provider only takes cash and does not give receipts. I agree this is not my job to inform an un-informed parent on how to take care of business...but I hate people trying to get over on other people.

This really ****s!

Thanks

It sounds like a ****y deal but in all honesty, I feel that it is the parents responsibility to know their rights in regards to who they pay and how.

If this parent is choosing a provider who only accepts cash, then that is on her. I personally would not choose a provider who told me that as I would immediatley suspect there was something shady going on.

Here in my State if you agree to accept the state program...then your're agreeing to the pay scale they have in place and can not charge the parents out side of that. Even the parent fee is based on the parents allowable income per-state guidelines.

I guest I feel so strongly about this too because I once receive state funds to help pay for childcare and what have been very upset if my daycare would have charge me extra just because the state didn't pay their full rates for my kid.

Thanks

That makes the situation even ****-ier (! is that even a word?) But again, the parent should know this as SHE is the one applying for and allowing the state to make payments on her behalf.

The parent should know that the provider isn't suppose to be charging more but is still doing so.

I still think this whole thing falls on the parents shoulders as the recipiant of a subsidized program it is their responsibility to know the rules and regulation of the program.

[frugalmama4]

On the other hand, why is it fair for me to accept less for one child over another? I don't do the full amount of work/care for both?

In my state, parents sometimes have a co-pay (state pays max 125, provider charges 150, parent has a $25 copay). I no longer accept state pay, but if I did, I would add it back into my handbook that parents are required to pay the difference, including paid time off, when kids or provider are out sick, etc.

Totally agree Why should you lose income...and if you can't afford too then dont take part in the program....as the business owner you have choice. Yes, here too parents have a "co-pay/parent fee". But this proivder wants to charge on top of that..."which the program pprgram doesnot allow.

Look at it this way...if you get food stamps...should wal-mart limit the type of food you can buy???

[daycarediva]

Totally agree Why should you lose income...and if you can't afford too then dont take part in the program....as the business owner you have choice. Yes, here too parents have a "co-pay/parent fee". But this proivder wants to charge on top of that..."which the program pprgram doesnot allow.

Look at it this way...if you get food stamps...should wal-mart limit the type of food you can buy???

Ahhh ok I see. She is charging more than allowed to. THAT could be fraud, in my state if she is caught she could be not allowed to be a subsidized provider, again, ever AND have to pay it ALL back.

[Crystal]

Here in my State if you agree to accept the state program...then your're agreeing to the pay scale they have in place and can not charge the parents out side of that. Even the parent fee is based on the parents allowable income per-state guidelines.

I guest I feel so strongly about this too because I once receive state funds to help pay for childcare and what have been very upset if my daycare would have charge me extra just because the state didn't pay their full rates for my kid.

Thanks

I would really check into that. I do not believe this is accurate. There is no way the government can tell you you have to accept less for a child because they are state pay.

Typically the law is that you cannot charge state pay clients MORE than other families and you can require that they pay the difference between what you charge every other client and what the state pays.

The provider should recieve a 1099 from the state agency that will detail her payments recived and it is to be filed with her tax return, as it is reported directly to the IRS. She should also claim the other amount recieved from the parent, and if she does not the parent can still claim it and the IRS will contact the provider regarding the discrepancy in what she claimed as income and what was reported by her clients.

As far as the OP.....it really is none of your business, and calling up your client and talking about it would be more unethical than what the other provider is doing, IMHO.