Bills Offering Federal Relief to Childcare Providers Simplified & Explained

Coronavirus (COVID-19) has devastated the childcare industry, leaving childcare providers without protections from income loss and family childcare providers without access to unemployment. Everyone is looking to the federal government for an economic stimulus that will protect and save the industry from ruin.

At this stage, many providers have voluntarily closed and are not collecting tuition payments. Others have been mandated to close by their state, including Massachusetts, Kentucky, and Vermont. Many others have limited either how childcare centers and homes operate or who can attend. Ohio is requiring providers to operate under a pandemic license and limit children to six per room. States who have enacted ‘safer at home’ orders or directives to shelter in place have limited those who can access childcare to workers deemed essential or children in exceptionally vulnerable situations.

Meanwhile, childcare providers have laid off staff and are wondering how they’ll pay their bills in the immediate future.

The federal government has passed some bills and are considering others to provide relief to small businesses across the country. It's important to note that none of these are specific to the early childhood education industry but have provisions that may help childcare providers and we outline those provisions below.

Paid Sick Days for Public Health Emergencies and Personal and Family Care Act
Introduced: 3/5/2020
Passed: 3/18/2020

What it does: Requires private employers with fewer than 500 employees to provide paid sick time to an employee who can’t work because they’re ill with COVID-19 symptoms, they’ve been told to quarantine or self-isolate by authorities or a medical provider, they are caring for a child whose childcare provider is unavailable because of COVID-19, or the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury. There is no 30-day waiting period - an employee is eligible as soon as they’re on payroll.

Are there exceptions: Yes. Small business with fewer than 50 employees are exempt from the requirement to provide paid sick leave to allow employees to care for a child whose school or place of care is closed, or if their child care provider is unavailable due to coronavirus precautions, if doing so would jeopardize the viability of their business. Also, certain healthcare providers and emergency responders can be excluded from the definition of employee.

Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020
Introduced: 3/5/2020
Passed: 3/6/2020

What it does: While the bill provides $8.3 billion in emergency funding for federal agencies to respond to the coronavirus outbreak, most of it is focused on healthcare-related items, like developing and procuring vaccines. However, a portion of the $8.3 billion is dedicated to Small Business Association Disaster Loan Program Account.  

Will it help: Possibly. While many childcare providers say they are not able to repay small business loans, there are components of other bills that offer total loan forgiveness if the money is used immediately to keep the business open and pay staff who would otherwise be laid off.

Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

Introduced: 3/19/20

What it does: This is the major economic stimulus package. With respect to small businesses, the CARES Act extends size of the loans available through the U.S. Small Business Association and qualifications for borrowers. In addition, it requires that the SBA collect no fees or reduce fees on these loans to the maximum extent possible. It states that prepayment penalties are to be waived and defers all loan payments for up to one year. The CARES Act has no limit on the total loan commitment that can be guaranteed by the SBA and raisies the size of the Express loans from $350,000 to $1 million for the rest of 2020. Loan forgiveness is also provided in the CARES Act when the loan is used to maintain continuity of business in 2020 for payroll and debt payments. Small businesses who lay off workers can be penalized in the amount forgiven.

The CARES Act has tax benefits for businesses as well. Payroll and employment taxes for 2020 may be deferred, and rules on carrying back operating losses are to be relaxed.

The Act sets aside $425 billion in direct loans and loan guarantees for essential businesses, states and municipalities in addition to $50 billion for the airline industry, a separate $8 billion for cargo airlines, and $17 billion for businesses deemed critical to national security.  

The education portion of the CARES Act does not specifically discuss early childhood education.

Finally, the CARES Act establishes Pandemic Unemployment Assistance, allowing self-employed workers, including family childcare providers, access to unemployment insurance.

Will it pass: A version of the CARES Act will pass. House Democrats have blocked the bill thus far, citing the fact that the bill does little to support the average American while serving as a corporate bailout for major industries. Negotiations continued and a vote is expected on 3/25.

Supporting Students in Response to Coronavirus Act
Introduced: 3/13/2020

What it does: In addition to helping students with financial aid and assist with expenses related to education and unexpected college closures, the bill provides $600 million in mandatory funding to provide grants to early care and education programs to maintain critical program operation. This money is to be used to meet emergency staffing needs, cover costs to clean and sanitize facilities, and train and support staff.  

In addition, it sets aside $3 million in funding for grantees in the National Child Traumatic Stress Network to provide resources for families, caregivers, early care and education programs, teachers, principals, administrators, and other school leaders to help address the challenges related to stress associated with COVID19.

Is it enough: Absolutely not. Even in conjunction with the CARES Act, $600 million plus small business loans will not support the fragile industry.

First Five Years Fund’s Letter to Congress
On 3/17, the First Five Years Fund, together with prominent early childhood education nonprofits submitted a letter to House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, Senate Majority Leader Mitch McConnell, and Senate Minority Leader Chuck Schumer. In this letter they laid out the absolute necessity for immediate and substantial financial relief specifically for the childcare industry.

Since submitting their request, First Five Years Fund has published specific numbers behind their request. They have specified the need to be $6 billion over the next six months to sustain the industry as far as staffing costs and overhead and $4 billion to support the programs specifically ensuring essential workers have access to childcare over the next six months.

As of now, to our knowledge, no bill has been introduced to accommodate these requests.

State support
While these are all federal relief programs, some states may be offering both small businesses and childcare providers access to funding and support. Check with your governor’s office to see what your state is offering. Many have already begun offering unemployment to self-employed workers and issued grants to ECE programs. Most are continuing to make subsidy payments to programs that are closed.  

What you can do

Most importantly, make your voice heard. Contact your state senator and senate representatives to demand support for the ECE industry. You can find your senators and senate representatives here: https://whoismyrepresentative.com/

Here’s a sample letter to submit to your senator and senate representatives. Our apologies for your inability to copy and paste from this page. We have general settings on our site to protect our primary content from data scrapes. We’ll pin this info to the top of our Facebook page and send it out in an email to those who subscribe to our newsletter.

Early childhood education providers have been placed in impossible situations during the coronavirus (COVID-19) outbreak.

We have been deemed essential workers, been asked to risk our lives to help others, in some cases been asked to take more children than our typical ratio and capacity permit, all the while we’ve been offered no protections for our staff, our businesses, or ourselves.

The already fragile childcare industry, which has been proven to be integral to the success of the economy of the United States, is perilously close to collapsing. Without immediate and substantial economic relief providers will be forced to close, many of them permanently, exacerbating the childcare crisis that already existed before COVID-19 wreaked havoc.

We require your full support of the request submitted to House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, Senate Majority Leader Mitch McConnell, and Senate Minority Leader Chuck Schumer by the First Five Years Fund to provide immediate and substantial financial relief specifically to early childhood education providers.

Contact your governor’s office to demand emergency state relief as well. You can find contact information and links to your state website here: https://www.nga.org/governors/

Sample letter for your governor:
Early childhood education providers have been placed in impossible situations during the coronavirus (COVID-19) outbreak.

We have been deemed essential workers, been asked to risk our lives to help others, in some cases been asked to take more children than our typical ratio and capacity permit, all the while we’ve been offered no protections for our staff, our businesses, or ourselves.

The already fragile childcare industry, which has been proven to be integral to the success of the economy of the United States, is perilously close to collapsing. Without immediate and substantial economic relief providers will be forced to close, many of them permanently, exacerbating the childcare crisis that already existed before COVID-19 wreaked havoc.

We demand you preserve and protect early childhood education providers and the families we serve.

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