Indiana Daycare Laws: Licensing, Ratios, and Inspections

Indiana daycare laws are set primarily by the Indiana Family and Social Services Administration (FSSA), through its Office of Early Childhood and Out-of-School Learning (OECOSL), which licenses centers and homes, inspects them, and enforces standards on background checks, staffing, health, safe sleep, and emergencies.¹ Federal rules on disability access, civil rights, wages, and food programs sit on top of the state framework. What follows is what operators, staff, and parents most need to know.

Which Programs the Law Covers

Indiana treats different types of providers differently, so the first question is which category a program falls into.²

A licensed child care center operates outside a private home and meets the full requirements of Indiana Code 12-17.2-4 and 470 IAC 3-4.7.
A Class I licensed child care home serves up to 12 children at a time, with an allowance for up to 3 additional school-age children during the school year. Counting the caregiver’s own children, no more than 15 children under age 11 can be in the home at once.³
A Class II licensed child care home serves more than 12 but no more than 16 children at once, and must meet all Class I requirements plus additional standards.³
An unlicensed registered child care ministry is a religiously affiliated program that registers with FSSA and files a separate application with the Department of Homeland Security, Fire and Building Safety Division.
A legally license-exempt provider qualifies for an exemption from full licensure but still registers with FSSA and passes an onsite inspection.

The centers and licensed homes carry the heaviest regulation, and most of what follows applies to them.

Getting Licensed

The application flows through FSSA. Prospective providers complete an online interest form, attend two orientation sessions for their provider type, then submit an application in the state’s I-LEAD system covering the facility layout, staffing plan, and services.²

Before a license issues, OECOSL inspectors visit the site. They verify that the space meets health, safety, and sanitation standards, that zoning and fire safety rules are met, and that every staff member has cleared the required background checks.¹ After licensure, OECOSL consultants return for ongoing inspections and technical assistance, and any significant operational change has to be reported to FSSA.

Background Checks

Every person who works at a regulated provider for pay, supervises children, or has unsupervised access to children must pass a criminal background check. In home-based programs, that extends to every adult age 18 or older who lives in the household.⁴

The Indiana check has three parts: a federal and state fingerprint search, a check of the Indiana sex offender registry, and a search of the Child Protection Index for child abuse and neglect records. The criminal check must be renewed every three years. A staff member who has been out of child care work for more than 180 days needs a new check before returning. The sex offender registry and Child Protection Index searches are repeated every year.⁴

Federal law adds more. The Child Care and Development Block Grant Act requires FBI fingerprint checks through Next Generation Identification, a National Sex Offender Registry search, and state criminal registry checks in every state where the person has lived during the past five years.⁵ Indiana’s procedures incorporate those requirements.

Staff Qualifications and Training

A child care center director must be at least 21 years old and meet one of these education paths, with grades of C or better where a degree is specified:⁶

A bachelor’s degree in early childhood education or in elementary education with a kindergarten endorsement.
Any bachelor’s degree, plus either 15 credit hours of college coursework focused on children age six or younger, or a Child Development Associate (CDA) credential.
An associate’s degree in early childhood education, plus at least three years of experience in an early childhood program.

Caregivers working under a director generally need a high school diploma or GED and pre-service training before taking on responsibility for children. Annual professional development is expected, covering areas such as recognizing child abuse, nutrition, and behavior management. FSSA approves the workshops and courses that count.

Child-to-Staff Ratios

Licensed centers must post the ratio chart in every classroom and at the sign-in area. The maximums are:⁷

Infants: 1 caregiver per 4 children, group of 8.
Toddlers: 1 per 5, group of 10.
2-year-olds: 1 per 5, group of 10.
30 to 36 months: 1 per 7, group of 14.
3-year-olds: 1 per 10, group of 20.
4-year-olds: 1 per 12, group of 24.
5 years and older: 1 per 15, group of 30.

The ratio is set by the age of the youngest child in the group, not the average. One infant in a mixed-age classroom drops the whole room to 1:4.⁸

Health and Safety

Health Screenings and Immunizations

Every child at a licensed center must have a written physical from a physician or nurse practitioner, completed within 30 days after enrollment or no earlier than 12 months before it. The exam has to include a medical history, a physical assessment, and a statement that the child has no condition endangering the child or others in the program. A child who does not meet these health requirements cannot attend.⁹

Parents can request a religious exemption from immunizations, physical exams, or medical treatment through a signed written request kept in the child’s health record. The exemption does not stop the center from using emergency first aid on the child or from excluding the child during a contagious disease outbreak.⁹

Safe Sleep

Any licensed provider caring for infants under 12 months must complete a state-approved safe-sleep training course and follow safe-sleep practices. Penalties escalate with each inspection during a single licensing period:¹⁰

First inspection with a violation: formal warning letter.
Second: $50 fine per violation.
Third: $75 fine per violation.
Fourth: license placed on probation for up to six months, plus $100 per violation.
Fifth: license suspended or revoked for one year, plus $250 per violation.

Failing to pay a safe-sleep penalty can result in license revocation for up to two years.¹¹

Meals

Providers participating in the federal Child and Adult Care Food Program (CACFP) follow set meal patterns. For infants birth through five months, breast milk or iron-fortified formula is the only acceptable feeding. From six through eleven months, cereal, protein, and small amounts of fruits and vegetables are introduced alongside breast milk or formula. Fruit and vegetable juices may not be served to infants at any age. As of October 2025, yogurt served to children must contain no more than 12 grams of added sugars per six ounces, and breakfast cereals no more than 6 grams of added sugars per dry ounce.¹²

Medication

Prescription medication given at the facility requires a written order from the prescribing health professional and written permission from a parent or guardian. The labeled prescription must show the child’s name, the prescriber’s name, the pharmacy name and phone number, the fill date, the expiration date, and the dosage. Medications must be stored with child-proof caps, at the correct temperature, away from food, and out of children’s reach. Unused or expired medications go back to the parent for disposal.

Emergency Preparedness

Every regulated Indiana provider must have a written plan for evacuating in a fire or other emergency.¹³ Providers receiving Child Care and Development Fund subsidies must go further: their plans have to cover evacuation, relocation, shelter-in-place, lockdown, family communication and reunification, continuity of operations, and accommodations for infants, toddlers, children with disabilities, and children with chronic medical conditions.¹⁴

Licensed providers must run documented monthly fire drills that fully evacuate all children and adults, and must also train and practice responses to other identified local risks.¹⁵

Inspections and Penalties

OECOSL consultants inspect regulated programs regularly, and inspections can be unannounced. They review the physical space, records, ratios, safety protocols, and background check documentation. Inspection results are public, which gives parents a real tool for evaluating a program.

The general civil penalty for a violation of the child care article is up to $1,000 per violation. Operating a child care home without a required license can cost up to $100 per day for each day of unlicensed operation.¹¹ For serious or repeated problems, FSSA can suspend a license for up to six months or revoke it. A revoked provider generally cannot reapply for at least one year, though FSSA has discretion to waive the wait. Grounds for revocation include a finding of child abuse or neglect and certain criminal convictions involving the licensee, a household member, an employee, or a volunteer. Safe-sleep violations run on their own escalating penalty track, described above.

What Parents Can Do: Unannounced Visits

Indiana Code 12-17.2-3.5-7 gives parents and legal guardians the right to visit their child’s program, unannounced, during operating hours. No appointment, no advance notice.¹⁶ A provider that turns you away during operating hours is violating state law.

Providers also have to maintain written notification plans that spell out what happens if the caregiver becomes ill or seriously injured, how children will be cared for in an emergency, and how evacuation will work.¹⁵

Federal Laws That Also Apply

ADA Title III

Privately operated child care centers must comply with Title III of the Americans with Disabilities Act regardless of size, staff count, or whether they receive government funding.¹⁷

A center cannot refuse to enroll a child solely because the child has a disability. The narrow exceptions are a direct threat to others’ health or safety, or an accommodation that would require a fundamental change to the program. Higher insurance costs are not a valid reason to exclude a child; those costs are overhead spread across all families. A provider cannot charge a surcharge for a required accommodation, such as additional diapering for an older child who needs it because of a disability. Existing facilities must remove architectural barriers when readily achievable, and any facility built or substantially altered after March 15, 2012, must fully comply with the 2010 ADA Standards for Accessible Design.¹⁷

Federal Civil Rights

Providers that receive federal financial assistance, including those accepting Child Care and Development Fund subsidies, are subject to enforcement by the U.S. Department of Health and Human Services Office for Civil Rights. Federal law prohibits discrimination based on race, color, national origin, disability, age, or sex in any program receiving HHS funding, and violations can lead to investigation, resolution agreements, and loss of federal funding.¹⁸

Wages and Worker Classification

Running a daycare makes you an employer. Under the Fair Labor Standards Act, covered nonexempt employees must be paid at least the federal minimum wage of $7.25 per hour and receive overtime at one and a half times their regular rate for hours over 40 in a workweek.¹⁹ Indiana’s state minimum wage matches the federal rate.²⁰ Classification matters too: a caregiver who works a set schedule at your facility, uses your equipment, and follows your curriculum is almost certainly an employee, not an independent contractor. The federal economic reality test looks at six factors, including the employer’s control over the work, the permanence of the relationship, and whether the work is central to the business. Misclassifying workers can trigger back taxes, penalties, and liability for unpaid overtime.

Home-Office Deduction for Home-Based Providers

Licensed home providers get a break the general home-office rules don’t offer. Most businesses can only deduct space used exclusively for business; daycare providers are exempt from the exclusive-use requirement and can deduct a portion of home expenses even when the space doubles as family living area outside business hours. To qualify, you must be in the business of providing daycare and must have applied for, been granted, or be exempt from a state license, certification, or registration. The indirect-expense deduction is the percentage of your home used for daycare multiplied by the percentage of hours the space is used for that purpose during the year. You can also deduct 100% of the actual cost of food served to daycare children, or use the IRS standard meal and snack rates instead of tracking every receipt.²¹

Insurance

Indiana does not mandate a specific policy for licensed providers. Most carry general liability coverage for bodily injury and property damage claims, along with professional liability coverage for allegations of negligent supervision. Abuse and molestation coverage, which pays for legal defense and settlement costs tied to misconduct allegations, is increasingly treated as essential by insurers and families. Home-based providers should confirm that their homeowner’s policy does not exclude business activities; many standard policies do, which would leave daycare-related claims uninsured.

1
Family and Social Services Administration. Laws Rules and Related Policies
2
IN.gov. Become a Child Care Provider – FSSA: Carefinder
3
Family and Social Services Administration. Interpretative Guide for Child Care Home Rules
4
Family and Social Services Administration. Background Check Requirements
5
eCFR. Part 98 Child Care and Development Fund
6
Cornell Law School. 470 IAC 3-4.7-21 – Director Qualifications
7
Cornell Law School. 470 IAC 3-4.7-47 – Child/Staff Ratio Chart
8
Indiana Family and Social Services Administration. Child/Staff Ratios For Licensed Child Care Centers
9
Cornell Law School. 470 IAC 3-4.7-86 – Child Health Requirements
10
Indiana General Assembly. Indiana Code 12-17.2-5-3.7 – Safe Sleeping Practices; Violations; Penalties
11
Family and Social Services Administration. IC 12-17.2-5 Chapter 5 – Regulation of Child Care Homes
12
Food and Nutrition Service, U.S. Department of Agriculture. CACFP Infant Meal Pattern
13
Cornell Law School. 470 IAC 3-1.1-46 – Fire Prevention
14
IN.gov. Indiana OECOSL Emergency Preparedness and Response Plan for Child Care Support
15
IN.gov. IC 12-17.2-3.5 – Eligibility of Child Care Provider to Receive Reimbursement Through Voucher Program
16
Indiana General Assembly. Indiana Code 12-17.2-3.5-7 – Parent Notification Plan; Discipline
17
U.S. Department of Justice. Commonly Asked Questions about Child Care Centers and the Americans with Disabilities Act
18
HHS.gov. Compliance Enforcement
19
U.S. Department of Labor. Wages and the Fair Labor Standards Act
20
U.S. Department of Labor. State Minimum Wage Laws
21
Internal Revenue Service. Publication 587 (2025), Business Use of Your Home