Unlicensed/Uninsured Risk

[concerned42517]

She should at the very least, claim the income.

The risk of the other parents claiming it is pretty small though...since they are likely already claiming their max benefit with the care they get during the school year, it wouldn't financially benefit them to claim more....but it's not a risk I would take.

All licensing can really do is just shut her down. And since her parents are her landlords there isn't an issue there.

So that leaves liability. That's her biggest risk. And since she's unlicensed, a double indemnity clause in her contract wouldn't offer her much protection...especially since, while parents can sign away their own rights to sue, they cannot do so on behalf of their children. Their children, if injury caused lasting effects, could sue when they become of age to do so.

Hmmm, that is interesting. If it is true that the State's only action is to shut her down, then it sounds like the risk is actually quite low, barring any serious accident (at which point, I don't believe she is required to carry insurance and I'm guessing the culpability would fall on the parents).

Some light research into the tax evasion issue seams to suggest that, more often than not, the IRS is fairly lenient on small cases of tax fraud, requiring only that the difference in unreported income be paid (taxed at the highest bracket and including interest). Add in the fact that it is pretty unlikely she will get audited.

I don't agree with the morality of it and I will still advise her to reconsider, but I guess I can see why she has decided to risk it, given that it is a one time deal, for only 8 weeks.

[concerned42517]

So that leaves liability. That's her biggest risk. And since she's unlicensed, a double indemnity clause in her contract wouldn't offer her much protection...especially since, while parents can sign away their own rights to sue, they cannot do so on behalf of their children. Their children, if injury caused lasting effects, could sue when they become of age to do so.

I don't think she has a contract with the parents, just a "handshake". I don't know how much water a contract for an illegal operation would carry, but that is another thing worth considering. My head is kind of spinning with the whole legality of it and potential risk and I am not involved in the slightest. I'll pass along all the advice and I guess that's the best I can do. Thanks again for all the help.

[e.j.]

Hmmm, that is interesting. If it is true that the State's only action is to shut her down, then it sounds like the risk is actually quite low, barring any serious accident (at which point, I don't believe she is required to carry insurance and I'm guessing the culpability would fall on the parents).

If nothing happens to a child in her care and she's merely reported to EEC for operating an unlicensed day care, it's possible they'll just shut her down without any further consequence. I'm not sure, though. I've tried to do a search on what, if any, penalties there are but am coming up empty. That's not to say there aren't any; I just didn't find anything during a quick search.

The fact that she isn't required to carry insurance doesn't necessarily mean she won't be responsible for medical bills in the event a child is injured on her watch. If I were her, I'd be concerned that they could come after me - and my parents as property owners - to pay out of pocket for any injuries that happen on my watch.

Some light research into the tax evasion issue seams to suggest that, more often than not, the IRS is fairly lenient on small cases of tax fraud, requiring only that the difference in unreported income be paid (taxed at the highest bracket and including interest). Add in the fact that it is pretty unlikely she will get audited.

From what I've read in the newspaper, the likelihood of her being caught is probably fairly slim. Again, if it were me, I'd be more afraid I'd be putting myself on their radar if I did get caught. Maybe she tends to have better luck than I do, though!

I don't agree with the morality of it and I will still advise her to reconsider, but I guess I can see why she has decided to risk it, given that it is a one time deal, for only 8 weeks.

All it will take is one serious injury to make her regret the decision to operate illegally and it could happen in the first 8 minutes of care. I had a child trip on his own two feet while walking into my kitchen for a snack. He was right in front of me and it happened so fast, I wasn't able to react quickly enough to keep him from falling. His face hit the edge of a shelf on a bookcase and he got an ugly gash under his left eye. I cringe every time I think of how much worse it could have been had he actually hit his eye, broken his cheek bone or nose, knocked out his front teeth, etc. I hope she's mature enough to listen to your advice and decides to re-evaluate her plans. Good luck!

[concerned42517]

The fact that she isn't required to carry insurance doesn't necessarily mean she won't be responsible for medical bills in the event a child is injured on her watch.

Totally agree, I worded that part poorly. I think the issue is that she is well aware of the risk she is taking there. I was hoping maybe to sway her on the more probable event that she may get reported to EEC, or that she could face large fines or felony charges for fraud. I'm not sure a shut-down by the EEC is going to be enough to make her give up on the idea (really, the biggest issue from getting shut down that I can see is that it may effect her employment with the school and relationship with the parents).

My two year old nephew did the same thing just the other day. Tripped and cut his lip on the leg of a chair. He had to get several stitches for it.

[concerned42517]

**Update**

So, I finally talked to my friend and she is telling me not to worry about it. She says the she is covered under her professional educator insurance and has a waiver for the family to sign. I asked her if her insurance and the signed waiver would be honored in the event of an incident, since she would be operating illegally. She says that in Massachusetts you can watch a maximum of 6 kids without license as a babysitter. That doesn't jive with my research but she is only watching the kids four hours a day, four days a week, so maybe there is a time distinction between babysitting and family child care? I'm now a little worried that she is going into this blind instead. Hopefully, she is right and I'm just being a condescending donkey.

[LysesKids]

So, I finally talked to my friend and she is telling me not to worry about it. She says the she is covered under her professional educator insurance and has a waiver for the family to sign. I asked her if her insurance and the signed waiver would be honored in the event of an incident, since she would be operating illegally. She says that in Massachusetts you can watch a maximum of 6 kids without license as a babysitter. That doesn't jive with my research but she is only watching the kids four hours a day, four days a week, so maybe there is a time distinction between babysitting and family child care? I'm now a little worried that she is going into this blind instead. Hopefully, she is right and I'm just being a condescending donkey.

6 kids as a babysitter not happening from what I know about childcare in Mass unless it's the rare date night care in the families house. 6 unrelated kids for 4 hrs for 4 days is childcare if it's in her home and it's illegal regardless of how she wants to spin it unless she is licensed

[mommyneedsadayoff]

So, I finally talked to my friend and she is telling me not to worry about it. She says the she is covered under her professional educator insurance and has a waiver for the family to sign. I asked her if her insurance and the signed waiver would be honored in the event of an incident, since she would be operating illegally. She says that in Massachusetts you can watch a maximum of 6 kids without license as a babysitter. That doesn't jive with my research but she is only watching the kids four hours a day, four days a week, so maybe there is a time distinction between babysitting and family child care? I'm now a little worried that she is going into this blind instead. Hopefully, she is right and I'm just being a condescending donkey.

She would be operating illegally no matter how long the days or how many days she care for the kids. All it will take is a p!ssed off parent (and there is a lot of things that can make them upset) and she will be reported. They may just tell her to close and that is the only consequence, but the long term repercussions could be worse. If it stays on the record, she may not be able to get a license in the future. Her current daycare center may not rehire her because parent may cause a stink. Or the worse case...a kid dies or is seriously injured and her care is investigated and questioned. This happens to licensed providers as well, but being an illegal daycare doesn't help your case much

The tax stuff is probably not going to be a big issue if she has other income she is claiming through the year. However, I will always tell people to avoid dealing with the IRS anymore than you have to. This means filing your taxes. IF she is caught, she will not only be on the IRS radar, but she will pay those taxes back, plus interest, PLUS failure to file and failure to pay penalties. Those fees are what make back tax bills so expensive. They can put your tax bill in the thousands very quickly.

On a side note, are you a friend of hers or are you her parent? I am getting the vibe that her decisions are pretty upsetting to you and you need some support because you are worried for her. I think it is great to have people in your life who have your back and she may not appreciate it now, but hopefully she will understand your concern some day in the future. Childcare is such a crazy industry, imo. It is an age old practice (child rearing) and you think it would be as simple as watching some kids and making some money, but the liability of caring for other people's children is SOOO huge. The "what ifs" make you swallow very hard sometimes and thank your lucky stars it hasn't happened to you. Chances are, your friend will be fine and the summer will be uneventful, but all it takes is that one time and I am too old to take that risk

[e.j.]

She says that in Massachusetts you can watch a maximum of 6 kids without license as a babysitter.

She's wrong. http://www.mass.gov/edu/birth-grade-...c-license.html

The first sentence reads: If you would like to care for children, not related to you, on a regular basis in your home, you need a Family Child Care License.

[concerned42517]

She's wrong. http://www.mass.gov/edu/birth-grade-...c-license.html

The first sentence reads: If you would like to care for children, not related to you, on a regular basis in your home, you need a Family Child Care License.

This is the exact link I sent her when she brought up the babysitting exception.

[JackandJill]

So, I finally talked to my friend and she is telling me not to worry about it. She says the she is covered under her professional educator insurance and has a waiver for the family to sign. I asked her if her insurance and the signed waiver would be honored in the event of an incident since she would be operating illegally. She says that in Massachusetts you can watch a maximum of 6 kids without license as a babysitter. That doesn't jive with my research but she is only watching the kids four hours a day, four days a week, so maybe there is a time distinction between babysitting and family child care? I'm now a little worried that she is going into this blind instead. Hopefully, she is right and I'm just being a condescending donkey.

I am in MA and the bolded part is untrue. If she is watching even one unrelated child on her property/her residence she needs to be licensed.

I can see why she would want to bypass the process for such a short time, but getting caught could mean repercussion's in her current career at the center, or trouble getting a child care license in the future. I would think they would come down harder on her BECAUSE she is an educator and not just an unaware sahm trying to make some extra cash.

This is a well planned out business she is setting up. And to PLAN on not following any of the rules (state licensing regs, small business taxes, liability insurance - which I know is not required but she's crazy not to cover herself) will only hurt her more if there is an accident in her care, or she is caught.

ETA: I am licensed and I run a "play school" four hours a day, four days a week. I still need to fulfill every licensing requirement of the States. There are really no execptions!

[concerned42517]

She would be operating illegally no matter how long the days or how many days she care for the kids. All it will take is a p!ssed off parent (and there is a lot of things that can make them upset) and she will be reported. They may just tell her to close and that is the only consequence, but the long term repercussions could be worse. If it stays on the record, she may not be able to get a license in the future. Her current daycare center may not rehire her because parent may cause a stink. Or the worse case...a kid dies or is seriously injured and her care is investigated and questioned. This happens to licensed providers as well, but being an illegal daycare doesn't help your case much

The tax stuff is probably not going to be a big issue if she has other income she is claiming through the year. However, I will always tell people to avoid dealing with the IRS anymore than you have to. This means filing your taxes. IF she is caught, she will not only be on the IRS radar, but she will pay those taxes back, plus interest, PLUS failure to file and failure to pay penalties. Those fees are what make back tax bills so expensive. They can put your tax bill in the thousands very quickly.

On a side note, are you a friend of hers or are you her parent? I am getting the vibe that her decisions are pretty upsetting to you and you need some support because you are worried for her. I think it is great to have people in your life who have your back and she may not appreciate it now, but hopefully she will understand your concern some day in the future. Childcare is such a crazy industry, imo. It is an age old practice (child rearing) and you think it would be as simple as watching some kids and making some money, but the liability of caring for other people's children is SOOO huge. The "what ifs" make you swallow very hard sometimes and thank your lucky stars it hasn't happened to you. Chances are, your friend will be fine and the summer will be uneventful, but all it takes is that one time and I am too old to take that risk

That is some good intuition; she is a friend but we have recently gone on a couple dates so it is hopefully more than that. Unfortunately, she is pretty upset with me right now. I think I was able to show her that she is actually taking on a pretty big risk but she says it is way too late to do anything about it now and that she doesn't need my worry/stress on top of her own.

I have agreed not to mention it again, which, honestly, is chewing me up because I feel like there are options still available that could be pursued. The school apparently is well aware of the arrangement and most of her coworkers are running similar programs. Also, someone is giving her bad info. Seems to me that the school should provide whatever assistance they can to get her operating legally (or at the very least, be upfront about the risks).

Oh well, I guess I will have to trust in her skill/experience with the kids, and hope for no catastrophes. I think that's actually the biggest reason she is upset with me; I am not trusting her to make her own decisions. So I guess I'll go against my normal nature and say it is better to be happy then to be right.:

[Cat Herder]

As a possible romantic partner, I would assume you'd be more concerned about how easily she is able to manipulate you and distort reality to rationalize committing an illegal act.

IRL, White knights have short life spans.

I'd tell my adult sons "when women show you who they are, believe them." :hug:

[concerned42517]

As a possible romantic partner, I would assume you'd be more concerned about how easily she is able to manipulate you and distort reality to rationalize committing an illegal act.

IRL, White knights have short life spans.

I'd tell my adult sons "when women show you who they are, believe them." :hug:

I appreciate the advice, but people tend to be more than just a few paragraphs in a forum. I don't agree with her decisions but I'm not going to get into a war of attrition over it with her. If that means I've been "manipulated" or am being a White Knight, so be it.

[e.j.]

I think that's actually the biggest reason she is upset with me; I am not trusting her to make her own decisions.

She's certainly not making it easy for you! You've given her information and advice. Unfortunately, you can't force her to listen to you.