Aside from the fact that you need the job (I assume), it would probably make it look like their concerns were justified if you quit. That might possibly even follow you to your next job. I would agree with the others that said you should have a talk with your boss to make sure you aren't violating any rules. You could ask what you can do or not do to make the parents feel more comfortable. As long as you aren't alone with a child and you let the child take the lead as far as when and how long to hug, I think you're on solid ground. They have to check out any concerns, so don't take that personally or hold it against your boss. But when they say "parents" have concerns, I would bet money that it's probably just one parent or two at the most. People tend to exagerate the number to make it look like their concern carries more weight than it actually does.

One more thing. If any parent says they don't want you to hug their child even if the child starts it, ask that the parent explain to the child that he/she isn't to hug you anymore. The child won't understand it no matter who tries to explain it, but I'd also bet money that if it comes to that, the cowardly parent will try to lay it all on you and say "well just don't hug him anymore," making you look like the bad guy in the kid's eye's. I wouldn't let them do that. Tell the parent that you couldn't in good conscience reject any child that starts a hug.

I don't blame you for being ticked off and hurt. It's sad our world has come to this.

Dako0ta