Child Care Providers Reach Historic Second Agreement With State On Covid-19 Relief For Providers And Families

Today, the 40,000 child care providers in California represented by Child Care Providers United (CCPU) announced a second landmark agreement with the state that will further stabilize an industry that has been on the brink of collapse since long before the COVID-19 pandemic hit, and begin to rebuild the early education capacity California’s economy needs to recover.

The agreement, made with the Governor will be enacted upon approval by the Legislature, includes additional financial support for providers who have faced tremendous financial losses from fluctuating enrollment and shouldered steep costs for supporting online learning. The agreement supports California’s working families by funding increased child care capacity statewide, including support for providers who closed their doors temporarily during the pandemic. Union leaders made the following comments on the agreement:

“This agreement is welcome news to providers like me who have been living on a razor’s edge throughout the pandemic, forced to close our doors to keep our communities safe time and time again, without knowing if we’d ever be able to re-open,” said Patricia Moran, a child care provider in San Jose and member of CCPU’s COVID-19 workgroup. “This agreement shows when we stick together as providers and union members to fight for what’s right for the children and families we serve; our voices will be heard. We are building momentum to win a child care system worthy of our children’s future and to make California a national leader in early learning.”

“Child care providers across the state have faced immense financial and emotional burdens since the beginning of the COVID-19 pandemic. As they saw operating costs skyrocket, they also supported the children of frontline workers and created stability in their homes, with some providers extending their hours just so frontline nurses could take extra precautions to avoid spreading COVID-19 to their children. These protections and supports are long overdue. They were won because child care providers who, on top of their more than full-time jobs, spoke out and advocated for their profession and for the families and children they serve,” said Max Arias, Chairperson of CCPU.

“This agreement puts California’s child care providers in a strong position to win even greater improvements in early education as we negotiate our first-ever contract with the state. We hope to see the legislature approve this agreement swiftly,” said Johanna Puno Hester, Vice Chairperson of CCPU. “The pandemic took its greatest economic toll on women, demonstrating why a strong child care infrastructure is vital to building an equitable economy that works for all Californians. We are proud that a union led by women of color is showing the way forward, strengthening early learning and women’s vital role in our economy. We also expect the state to partner with us in a robust way as we continue negotiating our first full contract, just as it did in this short-term agreement.”

The agreement includes:

  • Money to stabilize providers including $600 per child stipends for providers caring for subsidized children; $3500 stabilization stipends for all licensed providers, including those temporarily closed to support them reopening; extend policies that provide paid COVID closure days and reimbursing subsidy providers based on enrollment so that they aren’t penalized for children’s absences; and mental health support designed to support the expertise, best practices and well-being of providers and the families they serve impacted by COVID-19.

  • Money to support families including a $25 million investment to expand child care capacity, including helping closed providers reopen, and address unmet child care needs, and waiving fees for all families.

Today’s agreement is the second significant breakthrough won by CCPU since the COVID-19 pandemic struck California. Buoyed by these early wins, union members have set their sights on negotiating a first collective bargaining agreement with the state that addresses provider compensation and benefits, training and professional development, and other priorities to strengthen early learning for children and families.

Even before COVID-19 forced the closure of thousands of child care businesses, most California families lived in child care deserts where the need for care far outnumbers slots available. The union hopes to continue to work collaboratively with the State of California to build a 21st-century, high-quality child care system in California that meets the needs of every child, parent, and early educator.

WHAT – What benefits does the Retirement Fund expect to offer providers?

Expand the Retirement Fund Benefits Table to see benefits.

 

 Plan Rules
Eligible participants*

You are eligible to participate in the Retirement Plan for a 2024 contribution if you are:

  • A licensed child care provider
  • Who has been paid 6 or more months of child subsidy in the 2023 calendar year (can be non-consecutive months).
Eligibility for benefit credit for contributions in 2024*

You will earn your full service credits for 2023 if you were paid for ten or more months of child subsidy in 2023.

If you were paid for 6 or more months of child subsidy, you will receive 60% of your service credits, 70% for 7 months, 80% for 8 months and 90% for 9 months. You will not earn any service credit if you were paid for less than 6 months.

ContributionsThe only contributions to the Retirement Plan will be paid by the State. The Plan does not accept contributions from you.
Amount of annual employer contributions for 2023 service allocable to participants in 2024*

The amount of the State contribution on your behalf in 2024 will be based on two factors:

(1)  the number of years and months that you held a license as of 12/31/23; AND

(2)  the number of months that you were paid for a subsidized child in 2023.

  • If you were paid for ten or more months, you will receive your full contribution.
  • If you were paid for 6 to 9 months, you will receive a pro-rated contribution.
  • If you were paid for less than 6 months, you will not receive a contribution in 2024.
Amount of annual employer contributions for 2024 service allocable to participants in 2025*You will earn one full service credit for the State contribution on your behalf in 2025 if you were paid for ten or more months of child subsidy in 2024. If you were paid for 6 to 9 months in 2024, you will receive a pro-rated service credit. You will not earn any service credit if you were paid for less than 6 months in 2024.
VestingYou are “vested” in any contribution correctly made to your account. You do not need to work a minimum number of years before 2024 to be entitled to a benefit.
Distribution events

You can elect to receive your account when:

  • You stop all work as a licensed provider for 9 consecutive months at any age (“terminate from service”);
  • You stop all work as a licensed provider for 3 consecutive months at age 60 or older (“retirement”); or
  • You attain age 73, which is the age you are required to start receiving payments, unless you are still working.
Forms of distributions

If you are age 60 or older and stop all work as a licensed provider for 3 consecutive months and elect to retire, you can choose to receive your account balance as:

  • One lump-sum payment
  • Approximately equal monthly payments for 5 years
  • Approximately equal monthly payments for 10 years

If you are younger than age 60 and stop all work as a licensed provider for 9 consecutive months, you can only elect to receive your account as one lump-sum payment.

Death benefitsSince your account is 100% vested, you can designate a beneficiary (or multiple beneficiaries) to receive your account balance if you die before you receive it.
InvestmentsThe Board of Trustees will manage how the Retirement Plan is invested on your behalf, with the assistance of investment professionals.

*Special rules apply to providers where more than one provider is on the payment record.

who

Who is eligible for the Retirement Fund benefits?

State contributions to the Retirement Plan are tied to the child care subsidy program. To be eligible for retirement benefits in 2024, you must be a licensed provider who has have been paid for work with a subsidized child in at least 6 months in 2023-these months do not need to be consecutive. License exempt providers are not eligible; however, if you become licensed in a year, your work in that year may count for eligibility.

when

When will the benefits be available?

State contributions to the Retirement Plan are tied to the child care subsidy program. To be eligible for retirement benefits in 2024, you must be a licensed provider who has have been paid for work with a subsidized child in at least 6 months in 2023-these months do not need to be consecutive. License exempt providers are not eligible; however, if you become licensed in a year, your work in that year may count for eligibility.

how

How can I get help enrolling?

The Plan will automatically enroll you based on the information it has but you should immediately complete the form that the Plan will send you to be sure that the Plan has all of your current information and that you receive credit for your years of licensed work.