California child care providers are largely women of color who, for far too long, have been earning low wages for doing essential work. Thanks to the dogged efforts of Child Care Providers United (CCPU) Union and advocates like CCRC, an agreement was reached for a two-year agreement between CCPU and the State of California.

The 2023-2024 state budget, which was adopted earlier this summer, includes more than $1.4 billion over two years to supplement reimbursement rates for all subsidized child care providers. The agreement also features a condition for providers to be paid based on child enrollment through September 30, 2023, rather than attendance. The agreement adopted an alternative methodology plan for calculating provider reimbursement rates that reflect the true cost of providing care.

The budget agreement also provided relief from burdensome family fees – a co-pay for child care required by the state. Effective October 1^st, 2023, family fees will be eliminated for all families below 75% of the State Median Income. For households earning above that rate, fees will be assessed at only one percent of income. The legislature also agreed to forgive all family fee debt owed prior to the pandemic.

“This historic agreement is thanks to the tireless efforts of CCPU, Parent Voices, and child care advocates,” said CCRC President & CEO Dr. Michael Olenick. “Child care is essential to supporting our economy, not to mention it’s critical to the early learning and development of children in our community. This is a big win for families and caregivers.”

Specific to CCPU members, the agreement (Senate Bill 101) also includes:

1. $600 million over two years for increased compensation for subsidy providers,
2. $100 million for health care fund, and
3. $80 million for a retirement fund, making California the first state in the country to offer providers this benefit.
4. Continuation of paying providers based on enrollment through June 20, 2025.
5. Changed the definition of full-time care to any care provided for 25 hours or more per week (the current definition is 30 hours).

The agreements between the state and CCPU were ratified by the CCPU on July 31, but still need to be voted on by the legislature and signed by the governor. Details on the implementation of the rate increase are expected to be revealed in the trailer bills due out mid-August. In addition to adopting these measures for CCPU members, the state will also come to agreement on parity for the remainder of the subsidized child care providers including how their reimbursement increase will be structured.  It may take several weeks before we see the details of how the rate increases will be implemented.

“We are proud of our agency’s role in achieving this commitment from California to providers and families,” said Olenick. “And to our care providers, thank you for your ongoing dedication to serving children and families.”