When your loved one needs in-home care, finding the right caregiver feels like the biggest challenge. But once you've found that perfect match, a new set of questions emerges: How do I handle payroll? What are my tax obligations? Am I following all the employment laws?

If you're feeling overwhelmed by the legal and administrative side of hiring a caregiver in Washington State, you're not alone. The good news is that with the right guidance, managing payroll and staying compliant doesn't have to be complicated.

Understanding Your Role as a Household Employer

When you hire someone to provide care in your home, you typically become what's known as a "household employer." This means you're responsible for various legal obligations, from payroll taxes to workers' compensation insurance. In Washington State, these responsibilities are particularly comprehensive, with additional protections for domestic workers that go beyond federal requirements.

It's important to note that in most cases, your caregiver is considered an employee, not an independent contractor. This distinction matters because it determines your tax and legal obligations. The key factor is control – if you direct when, where, and how the work is done (which is typical for in-home care), then you have an employer-employee relationship.

Getting Started: Essential Registrations

Before your caregiver's first day, you'll need to complete several registrations:

Federal Requirements:

• Obtain an Employer Identification Number (EIN) from the IRS

• Prepare to verify your caregiver's employment eligibility with Form I-9

Washington State Requirements:

• Register for a Unified Business Identifier (UBI) through the Washington State Business License Application

• Set up accounts for workers' compensation, unemployment insurance, and other state programs

This registration process might feel daunting, but it's a one-time setup that establishes you as a legal employer. Many families find that working with a facilitator like Clara can simplify this process, as we can guide you through each step and ensure nothing is overlooked.

Navigating Washington's Wage and Hour Laws

Washington State has some of the most protective employment laws in the nation, and these apply to caregivers working in private homes. Here's what you need to know:

Minimum Wage: As of 2025, Washington's minimum wage is $16.66 per hour, though Seattle and other cities have higher rates. In Seattle, for example, domestic workers must be paid at least $20.76 per hour.

Overtime: Caregivers must receive overtime pay (1.5 times their regular rate) for hours worked over 40 in a week. This applies even to many live-in caregivers, especially with pending legislation that would eliminate historical exemptions.

Breaks: Workers are entitled to meal and rest breaks. In Seattle, this includes a 30-minute meal break for shifts over 5 hours and a 10-minute paid rest break for every 4 hours worked.

Record-Keeping: You must maintain accurate records of hours worked, wages paid, and leave taken. These records should be kept for at least three years.

Managing Payroll Taxes and Deductions

As a household employer, you're responsible for several types of taxes:

Federal Taxes:

• Social Security and Medicare (FICA): Both you and your employee pay 7.65% each

• Federal Unemployment Tax (FUTA): Paid by the employer only

• Federal income tax withholding (if requested by the employee)

Washington State Obligations:

• Unemployment insurance (employer-paid)

• Workers' compensation insurance (employer-paid)

• Paid Family and Medical Leave premiums (employee-paid, but you must collect and remit)

• WA Cares Fund contributions (employee-paid long-term care insurance)

You'll need to provide detailed pay stubs showing all deductions and file quarterly reports with the state. At year-end, you must issue W-2 forms and file Schedule H with your personal tax return.

Insurance Requirements

Washington State mandates workers' compensation insurance for household employers. This coverage protects both you and your caregiver if a work-related injury occurs. Unlike many states, Washington requires you to purchase this insurance through the state fund administered by the Department of Labor & Industries.

Understanding Leave Benefits

Your caregiver is entitled to several types of leave under Washington law:

Paid Sick Leave: Caregivers earn at least 1 hour of paid sick leave for every 40 hours worked. This can be used for their own illness, caring for family members, or domestic violence-related absences.

Paid Family and Medical Leave (PFML): This state program provides partial wage replacement for qualifying life events, funded through payroll deductions.

Other Protections: Employees may also be entitled to domestic violence leave and, in Seattle, live-in workers have the right to a 24-hour rest period after six consecutive days of work.

The Importance of Written Agreements

While not yet mandatory statewide (though this is changing), having a written employment agreement is crucial. This document should outline:

• Job duties and expectations

• Wages and overtime policies

• Work schedule and break times

• Leave policies

• Termination procedures

A comprehensive agreement protects both you and your caregiver by ensuring everyone understands their rights and responsibilities. Learn more in our article, "The Importance of Proper Contracts for Domestic Workers- Especially for Private Caregivers".

Staying Ahead of Changes

Washington's employment laws are evolving, with the pending Domestic Workers Bill of Rights set to expand protections significantly. This legislation would mandate written agreements, eliminate exemptions for live-in workers, and strengthen anti-discrimination protections.

Finding Support in Compliance

Managing all these requirements while caring for a loved one can feel overwhelming. That's where Clara comes in. As a facilitator of in-home care, Clara helps families navigate not just finding the right caregiver, but also understanding and meeting their obligations as household employers. We provide resources, guidance, and connections to payroll services that specialize in household employment.

How Clara Can Help

At Clara, we understand that families want to focus on their loved ones, not on complex employment regulations. That's why we're here to facilitate not just the care connection, but also to guide you through the administrative side of home care. Our team can help you understand your responsibilities, connect you with trusted payroll providers, and ensure you're set up for success from day one.

If you're considering hiring a caregiver in Washington State, or if you're already employing someone and want to ensure you're fully compliant, we're here to help. Contact Clara today to learn more about how we can support your family's home care journey. Visit us at www.clarahomecare.com or give us a call at 415-985-0926 to get started.

Together, we can ensure your loved one receives the care they need while you maintain peace of mind about the legal and administrative details.