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Ask The Lawyer By: Daniel A. Gwinn, Esq.

| April 16, 2018


QUESTION: A friend told me that it’s OK to run a child care business in your home, without a license, if you only accept cash payment. She said the license is only needed if you work with families that get assistance from the state. This does not sound right to me.

ANSWER: There’s a good reason it doesn’t sound right – it isn’t. Under Michigan Law, MCL 722.111, any person who provides care for children in their home for more than four weeks in a calendar year for annual compensation of more than $600 per child must have a license. If they care for up to six unrelated children they need to be licensed as a family child care home, if they look after seven to 12 unrelated children, they must be licensed as a group child care home.

How a child care provider is paid – cash, check, credit card, governments subsidy – has no bearing on whether they need a license. Perhaps your friend believes that caregivers who are paid in cash can get away with not being licensed. That is risky behavior. Running a daycare without a license is a criminal offense, that can result in a jail term.

Perhaps your friend is thinking of the exemption for babysitting which is now built into the law. If a person caring for a child receives no more than $600 in an entire year, the services can be classified as babysitting, and no license is needed. The exemption was created in 2009 after the state went after a Middleville mom who looked after friends’ children every morning – for free – until the school bus showed up.

If you’re thinking of starting a child care business, you may want to talk with a lawyer to make sure you satisfy all the requirements. The lawyers at GWINN LEGAL PLLC are experienced attorneys and are happy to answer your questions. Give us a call for a free initial telephone consultation about your legal needs. For consideration of your questions in our web column, please submit your inquiry on the “Contact Us” page of our website at

Information provided on “Ask the Lawyer” is current as of the date of publication. Laws and their interpretation are subject to change. The material provided through “Ask the Lawyer” is informational only; it should not be considered legal advice. Submitting a question to “Ask the Lawyer” does not create an attorney-client relationship between the person submitting the question and GWINN LEGAL PLLC. To view previous columns, please visit our website.

By: Daniel A. Gwinn, Esq.

Attorney and Counselor at Law
901 Wilshire Drive, Suite 550
Troy, MI 48084
(248) 247-3300
(248) 247-3310 facsimile

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