Care.com’s Move to Texas: A Strategic Shift or an Escape from Regulation?

In a major business move, Care.com, one of the largest online platforms connecting families with caregivers, has decided to relocate its headquarters from Massachusetts to Texas. This shift has raised eyebrows, particularly among those familiar with the company's history of regulatory challenges and its recent $8 million fine from the Federal Trade Commission (FTC). While the official reasons for the move likely include Texas’ business-friendly climate and lower operational costs, the state's looser childcare regulations cannot be ignored. Could this relocation be a way for Care.com to sidestep stricter oversight and liability risks? Let’s take a deeper look!

The FTC Fine: A Wake-Up Call for Care.com

Care.com has long marketed itself as a safe and reliable platform for families seeking childcare, elder care, pet sitting, and more. However, in August 2024, the FTC fined the company $8.5 million for misleading customers about background checks and safety assurances. The key issues cited by the FTC included:

- False Safety Claims: Care.com misled users into believing that caregivers underwent thorough background checks, when in reality, these checks were optional and required additional fees.

- Failure to Screen: The platform allowed individuals with criminal records to register as caregivers without proper vetting.

- Subscription & Billing Issues: Care.com made it difficult for users to cancel subscriptions, often charging them for services they no longer wished to use.

This fine was a significant blow to the company's reputation, leading many to question its commitment to safety. Care released a statement saying they were willing to fight them, but “settled to focus on childcare.” Insert the world’s biggest eye roll from this childcare specialist. This settlement also placed Care.com under increased regulatory scrutiny, particularly in states with stricter childcare laws, like Massachusetts. This scrutiny may have played a role in the company’s decision to move its headquarters to a state with fewer regulatory burdens.

Massachusetts vs. Texas: A Tale of Two Regulatory Environments

Care.com’s former home, Massachusetts, has some of the strictest childcare regulations in the country, including:

✔ Comprehensive background checks for all childcare providers.

✔ Low child-to-caregiver ratios, ensuring higher safety standards.

✔ Frequent inspections for licensed daycare facilities and service providers.

✔ Strong consumer protection laws that hold businesses accountable for misleading claims.

In contrast, Texas has a much looser regulatory framework, including:

⚠ Fewer restrictions on background checks for in-home and unlicensed childcare providers.

⚠ Higher child-to-caregiver ratios, meaning fewer staff members are required per child.

⚠ Less frequent oversight and fewer inspections compared to stricter states.

⚠ More exemptions for religious and home-based childcare providers, reducing state involvement.

By relocating to Texas, Care.com may be positioning itself in an environment where regulatory scrutiny is significantly reduced. This could allow the company to operate with less liability risk and fewer compliance costs, but it also raises concerns about safety standards.

The Impact on Care.com’s Business Model

Care.com operates as a third-party marketplace rather than a direct childcare provider. This means they facilitate connections between families and caregivers but do not directly employ the caregivers listed on their platform. Because of this model, they have often been able to avoid liability for safety issues that arise from inadequate vetting.

However, with the FTC fine and increasing pressure from consumer advocates, Massachusetts' stringent regulations may have made it harder for Care.com to continue business as usual without facing lawsuits or additional fines. Moving to Texas could provide the company with more legal flexibility and fewer barriers to onboarding caregivers, even if that comes at the potential cost of increased safety risks.

A Pattern of Prioritizing Profits Over Safety?

Care.com has faced multiple controversies over the years regarding its failure to properly vet caregivers. In previous articles on our blog about Care, we have highlighted cases where families unknowingly hired caregivers with serious criminal histories, leading to tragic incidents. These safety concerns, coupled with the company’s move to a state with higher rates of childcare-related incidents, make it reasonable to question whether this relocation is driven more by business interests than by a genuine commitment to improving safety.

Several reports suggest that states with looser childcare regulations, including Texas, tend to have higher rates of childcare-related accidents, abuse, and negligence cases. Given Care.com’s past struggles with vetting and safety oversight, moving to a state with fewer protections for families and children could create greater risks for users.

What’s Next for Care.com?

With this relocation, several questions remain:

- Will Care.com improve its background check policies? The company previously failed to implement adequate screening procedures, and Texas’ looser laws won’t require them to be as rigorous.

- Will they face fewer legal challenges? Moving to Texas reduces their exposure to Massachusetts’ strict consumer protection laws, potentially shielding them from future lawsuits.

- Will this impact childcare quality and safety? If Care.com prioritizes profit margins over enhanced safety measures, families may see higher risks when using the platform.

Final Thoughts: Is This Move Good for Families?

While relocating to Texas might make financial sense for Care.com, the implications for safety remain concerning. The company has already struggled with transparency and consumer trust, and shifting operations to a state with fewer safeguards could amplify these issues.

Families using Care.com should be extra cautious when hiring caregivers and consider conducting independent background checks rather than relying solely on the platform’s vetting process.

I will continue monitoring Care.com’s policies and business decisions to ensure that families stay informed about potential risks since it seems like every magazine and influencer is being paid to say how great Care is. Yet if you go on any of their social media posts you see nothing but unhappy customers.

What are your thoughts on Care.com’s move? Drop a comment below and let us know if you think this relocation is about business growth or avoiding accountability.