2023 Washington household employment tax and labor law guide - Care.com HomePay

2023 Washington household employment tax and labor law guide

Household employment requirements for families hiring a caregiver in Washington

Finding helpful Washington nanny tax information is not always easy. That’s why we’ve combined all the state and federal tax and labor law information you’ll need! Check out the information below that HomePay is here to help with.

Checklist for Washington household employers

We know you’re busy! Here’s a quick “to-do” list with links to extra details below.

Beginning of employment 

During employment 

Optional benefits for your employee

Ending employment

Beginning of employment 

Set up EIN & state tax account(s)

You must first apply for a EIN (Employee Identification Number) with the IRS. This will be used as your unique ID with both state and federal tax authorities. Then you can open an account with your state taxing authority.

Workers’ compensation

Household employers in Washington are required to carry workers’ compensation insurance if two or more employees each work 40 or more hours per week. These policies pay for medical expenses and lost wages if an employee has a work-related injury or illness. To acquire a workers’ compensation policy, please contact the Washington State Department of Labor & Industries at (800) 547-8367.

Employment posters 

Families in Washington are required to notify their employee of their rights by sharing these posters

During employment 

File returns, remit taxes and manage correspondence

  • File state employment tax returns throughout the year and remit state employer and employee taxes.
  • Remit federal employer and employee taxes via 1040-ES estimated tax payment voucher four times each year.
  • Each year end, prepare Schedule H and file with Form 1040; prepare and distribute Form W-2 to each employee; file Form W-2 Copy A/Form W-3 with the Social Security Administration (SSA).
  • Manage ongoing alerts and notices from the state (tax rates and labor law is subject to change at any time.

Minimum wage rates

  • Washington state: $15.74/hour
  • Seattle: $18.69/hour

Note: Whenever more than one rate applies, employers are required to pay the higher rate.

Washington overtime requirements

  • Live-out employees must be paid 1.5x their hourly rate for all hours worked over 40 in a workweek.
  • Live-in employees are not required to be paid overtime. 
  • Overtime is not required to be paid when work is performed on a holiday. 

Paid sick time

Household employers in Washington are required to provide paid sick time to their employees. Sick time can either accrue at the rate of 1 hour for every 40 hours worked or be offered in full at the beginning of the year. Employers choosing the latter option must calculate how much sick time their employee would accrue for the year and offer this amount. Unused sick time may carry over to the next year, but employers may cap it to 40 hours.

Paid family and medical leave

Household employees in Washington are eligible for 12 weeks of paid leave per year beginning in 2020. This is a state-run insurance program funded by payroll taxes withheld from the employee. Employees can use their leave to:

  • Care and bond after the birth of a child or the placement of a child under the age of 18.
  • Care for a family member that is ill or injured.
  • Recover after an illness or injury.
  • Help relieve family pressure due to active military service.

Employees are eligible to receive benefits if they have worked 820 hours or more during the previous 4 quarters prior to making a claim for benefits. Benefits are based on how much the employee makes on a weekly basis. Employers are required to provide this notice to their employee explaining paid family and medical leave benefits.

Seattle Domestic Worker Bill of Rights

Household employers in Seattle must provide several benefits in addition to what the state of Washington requires:

  • Provide a 30-minute uninterrupted meal period when their employee works more than 5 consecutive hours.
  • Provide employees with a paid 10-minute uninterrupted rest break for each 4 consecutive hours of work.
  • If the employee is unable to take uninterrupted breaks, they must be paid for the missed break(s). Families also need to pay their employee an additional 30 minutes and/or 10 minutes for each break they were not able to take. 
  • Families with a live-in employee must allow them to have an unpaid 24-hour period after 6 consecutive days of work.

Optional benefits for your employee 

Health insurance

Families with only 1 employee can make contributions toward their employee’s health insurance premiums and treat the amount as non-taxable compensation. In this scenario, neither the employee nor the employer are required to pay any taxes on that portion of the compensation.

Families with 2 or more employees have 3 options:

  1. Set up an Individual Coverage Health Reimbursement Arrangement (ICHRA).
  2. Set up a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA).
  3. Purchase a policy through SHOP (Small Business Health Options Program). 

Visit our health insurance page for more information about these options.  

Mileage reimbursements

The current federal mileage reimbursement rate is 65.5 cents per mile and only covers miles driven by your employee while on the job. Miles driven commuting are not eligible for reimbursement.

Ending employment 

Termination notice

Washington household employers are required to provide a termination notice if any employee submits a written request. Families must provide the notice within 10 days.

Managing unused PTO 

Washington household employers do not need to pay their employees for unused sick and/or vacation time, unless their employment contract specifies otherwise.

Close down your state employment tax account(s)

The state tax agencies expect you to file timely returns for as long as your tax accounts are open — even to report $0 in wages paid.

Maintain payroll records

Household employers are required to keep wage records on file for at least three years.

The information contained in this article is general in nature, may not be applicable to your specific circumstances, and is not intended to be a substitute for or relied upon as personalized tax or legal advice.

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