Nanny Taxes in Washington, D.C.

Household employers need to comply with tax, wage, and labor laws that affect nannies, in-home senior caregivers, and other household employees. While federal laws cover employers in all states, there are also state- and city-specific regulations that employers must follow. Here’s what you need to know about nanny taxes in Washington, D.C.

Washington, D.C. Minimum Wage

Household employees must be paid at least the highest of the federal, state, or applicable local minimum wage rates. Washington D.C.’s minimum wage rate of $17/hour applies. This rate will increase to $17.50/hour on July 1, 2024. The minimum wage will increase each year in proportion to the increase in the Consumer Price Index. Employers are required to display a minimum wage poster (PDF) in a conspicuous place where employees can readily see it.

Overtime

Household employees in Washington, D.C. are required to be paid at least time and a half for hours worked over 40 in a seven-day workweek. Overtime compensation is not required for live-in employees and isn’t required when work is performed on a holiday.

Washington, D.C. Unemployment Tax & Rate

In Washington, D.C., the new employer SUI (state unemployment insurance) rate is 2.7 percent on the first $9,000 of wages for each employee. Employers with previous employees may be subject to a different rate. This is an employer-only tax.

Workers’ Compensation Insurance

Household employers in Washington, D.C. are required to have a workers’ compensation policy if their employee works 240 hours or more in a calendar quarter. Get a quote on workers’ compensation insurance.

Domestic Worker Bill of Rights

Washington D.C.’s Domestic Worker Employment Rights Amendment Act includes a requirement for work agreements in household employment and an extension of human rights as well as occupational health and safety protections for household employees.

The work agreement must include:

• Start date of employment (and end date if applicable)
• Address where work will usually be performed
• Duties to be performed by the domestic worker
• Rate of pay per hour and overtime rate
• Form, place, and frequency of payment
• Date the first payment will be provided
• Weekly schedule, including days of the week, start time, end time, and number of hours of work per week
• Any rest breaks or meal breaks that are provided
• Types of leave from work provided and whether paid or unpaid
• Any other compensation or reimbursement provided by the household employer, such as health insurance premiums, transportation allowance, or separation pay;
• Whether the domestic worker must provide their own vehicle for the fulfillment of work duties

For live-in domestic workers, the work agreement must include a description of the type and value of lodging provided, time of sleeping period, and personal time allotment.

Washington D.C.’s human rights law has been amended to remove the exception for household employees from the protections of the law. It is now illegal to discriminate against domestic workers based on protected traits including age, color, disability, gender identity and expression, national origin, personal appearance, race, religion, sex, and sexual orientation. The law also provides protection against sexual harassment in the workplace.

Washington D.C.’s occupational safety and health law was also updated to remove language that excluded domestic workers from the law’s protections.

Read more about Washington D.C.’s domestic worker protections.

Universal Paid Leave

Washington D.C. employers who are required to pay unemployment insurance taxes also must contribute to the Universal Paid Leave program. Even families with just one employee need to comply with the law.

The Universal Paid Leave program provides employees in the district with (maximum of leave for each type in parenthesis):

• Parental leave to bond with a new child (12 weeks of leave)
• Family leave to care for an ill family member with a serious health condition (12 weeks of leave)
• Personal medical leave to care for one’s own serious health condition (12 weeks of leave)
• Pre-natal leave (2 weeks)

The maximum duration for each type of paid leave is over a 52-workweek period.

Paid leave benefits are funded by an employer payroll tax of 0.26 percent of their eligible employee’s gross or total wages.

The maximum paid family leave benefit is $1,099/week. This amount will increase with the area’s consumer price index for the previous calendar year.

All employers must post a paid family leave notice poster on their premises.

Learn more about Washington, D.C.’s Universal Paid Leave.

Accrued Sick and Safe Leave/Earned Sick and Safe Leave

Washington D.C.’s Accrued Sick and Safe Leave and Earned Sick and Safe Leave laws allow full-time and part-time household employees who spend 50 percent or more of their time working in the District of Columbia to receive paid leave for absences resulting from:

• A medical condition or to care for ill family members
• Receiving medical care for themselves or their family members
• Issues pertaining to domestic violence or sexual abuse

Household employees accrue leave at one hour per 87 hours worked not to exceed three days per calendar year. Accruals begin on the first day of their employment. Accrued leave is tallied based on the employer’s established pay period.

When the employee has been employed for 90 calendar days, they can use leave that has been accrued. Employees can use leave in one-hour increments. Household employers must carry over unused leave accrued, during a 12-month period, annually.

Family members are defined as:

• A spouse or domestic partner
• The parents of either the employee or the spouse
• Children, including grandchildren and foster children
• Brothers and sisters of either the employee or the spouse
• A residing child for whom the employee has parental responsibility
• A person who has cohabitated with the employee for no less than 12 months

Household employers are required to maintain accurate time and payroll records that reflect the use of paid leave for no less than three years.

A household employer doesn’t have to change their current leave policies if those policies allow their employee to:

• Accrue and access paid leave at the same rate or greater than the hours of paid leave provided by the law
• Use the paid leave for the same purposes as those set forth in the law

If the paid leave is foreseeable, an employee should make a request in writing to their employer at least 10 days or as early as possible, in advance of the paid leave.

If the paid leave is unforeseeable, an oral request for paid leave should be provided prior to the start of the work shift for which the paid leave is requested.

In the case of an emergency, the employer shall be notified prior to the start of the next work shift or within 24 hours of the onset of the emergency, whichever occurs sooner.

A household employer may require that paid leave for three or more consecutive days be supported by reasonable certification supplied by their employee.

Learn more about Washington D.C.’s provisions for paid leave.

Pay Transparency

Employers with at least one employee in Washington, D.C. – including household employers – must provide pay ranges in all public job postings and inform job applicants of healthcare benefits associated with the position while prohibiting employers from seeking information about a job applicant’s salary history.

The Wage Transparency Omnibus Amendment Act of 2023, which amends the Wage Transparency Act of 2014, must undergo a 30-day Congressional review before becoming law. If it is not disapproved during this review, it will become law as of June 30, 2024.

The pay range in a job posting for a household employee must include the minimum and maximum projected hourly pay that an employer, in good faith, believes at the time of the posting they would pay for the advertised job.

In limiting the ability to use an applicant’s wage history, the law prohibits household employers from:

• Screening prospective employees based on their “wage history”
• Requiring that their wage history satisfy minimum or maximum criteria
• Requesting or requiring that an applicant disclose their wage history “as a condition of being interviewed or as a condition of continuing to be considered for an offer of employment.”
• Seeking the wage history of a “prospective employee from a person who previously employed the individual”

The term “wage history” is defined as “information related to compensation an employee has received from other or previous employment.” The definition of “compensation” includes “all forms of monetary and nonmonetary benefits an employer provides or promises to provide an employee in exchange for the employee’s services to the employer.”

Learn more about Washington, D.C.’s pay transparency law.

Final Pay

A household employee who is discharged or who resigns or quits must be paid by the next working day following the termination.

Helpful Links for Nanny Taxes in Washington, D.C.

Washington, D.C. Department of Employment Services

Washington, D.C. Office of Tax and Revenue

DC Paid Family Leave

Federal Regulations

All household employers need to follow certain federal regulations including:

Fair Labor Standards Act (FLSA) Classification Guidelines

• Household workers are considered employees and not independent contractors. Learn more about misclassifying employees as independent contractors.
• Household workers are also non-exempt employees, which means they receive overtime pay of at least time-and-a-half for hours worked over 40 per workweek. Learn more about overtime pay.

FICA Taxes

Social Security and Medicare taxes are commonly referred to as FICA taxes. If you pay cash wages of $2,700 or more to any household employee in 2024 (or paid a domestic worker $2,600 or more in 2023), then you need to withhold and pay FICA taxes. FICA taxes are 15.3 percent of cash wages. As an employer, you pay 7.65 percent (6.2 percent for Social Security and 1.45 percent for Medicare). Your employee's share is also 7.65 percent, which you can withhold from their wages or choose to pay it yourself. You don't withhold or owe FICA taxes on wages you pay to your spouse, child under the age of 21, parent, or any employee under the age of 18 at any time during the calendar year.

Federal Unemployment Tax (FUTA)

If you pay a household employee total cash wages of $1,000 or more in any calendar quarter, you'll owe federal unemployment tax. This is an employer-only tax. FUTA is six percent of cash wages on the first $7,000 you pay an employee.

Mileage Reimbursement

If your employee uses their own car in the course of their work, you can reimburse them for mileage. For 2024, the IRS has set the optional standard mileage rate at 67 cents per mile driven. Paying mileage is not mandatory or you can reimburse your employee at a different rate. However, if the cost of mileage causes your employee to fall below minimum wage, then you need to reimburse them for mileage.

GTM Can Help with Nanny Taxes in Washington, D.C.

Call (800) 929-9213 for a free, no-obligation consultation with a household employment expert. We’ll answer all your questions and show you how to comply with wage, tax, and labor laws as a household employer. Or, if you’re ready to have GTM Payroll Services handle it all for you, get started with our nanny payroll and tax service.

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