Providers are Independent Contractors

Providers sometimes ask us whether they are considered Child Action, Inc. (CAI) employees because they receive payment from CAI. The answer is no; providers are not considered employees of CAI. Although we issue payment to providers, it is done so on behalf of the parent whose childcare expenses are subsidized through the subsidy programs administered by CAI. Providers are considered independent contractors.

Independent contractors are self-employed individuals who provide child care services and agree to receive payment from CAI on behalf of the parent. As such, providers determine their business hours, provide care in their homes, establish their rates and policies, and determine the start or end of their services for families they contract. This means you have the flexibility to set your schedule and manage your workload, which can be especially beneficial for those balancing other commitments.

As independent contractors, providers are responsible for tracking their income and expenses, paying and managing their taxes, and any other responsibilities that are part of being a business owner. CAI cannot verify employment, pay unemployment benefits, or be used for references when applying for loans or housing. It is important to remember that any money received from Child Action, Inc. is considered income; providers earning $600 or more per calendar year will have their wages reported to the IRS and will receive a 1099 Tax form to complete their taxes. It is the responsibility of the provider to file their taxes.

The Provider Booklet provides further information on the Independent Contractor Agreement. For additional resources, such as handouts, contact our Resource and Referral Department at (916) 369-0191.