When is an employer liable to pay unemployment insurance taxes under District of Columbia law?
Generally, an employer with one or more individuals performing services within the District of Columbia is liable under the District of Columbia Unemployment Compensation Act. It does not matter whether the services are performed on a part-time or temporary basis.
Employers of household help also become liable when they pay at least $500 in aggregate wages in any calendar quarter for such help. Once they reach the $500 threshold, employers of household help remain liable for all wages paid in subsequent quarters until they become inactive. Examples of household help are chauffeurs, cooks, gardeners, nurses, maids, and baby-sitters who are at least 18 years of age. Household employers have the option of filing on an annual basis.
Are any types of employment exempt from coverage under District of Columbia unemployment insurance law?
The following types of employment are not covered by District of Columbia unemployment insurance law:
- Service performed by an individual under 18 years of age as a baby-sitter
- Casual labor not in the course of an employer's trade or business
- Service by an individual employed by the individual's son, daughter or spouse
- Service by a child under 21 years of age employed by his/her parent
- Service as an insurance agent if entirely on commission
- Service performed in the employ of a church, religious convention, association of churches, or any organization which is operated primarily for religious purposes
- Service performed as part of an unemployment work-relief or work-training program assisted or financed by any federal or state agency or political subdivision, by an individual receiving such work relief or training
- Service performed in the employ of a foreign government
- Service performed in the employ of a public international organization such as the World Bank and the International Monetary Fund; and COMSAT
- Service performed in a facility for rehabilitation by a person receiving rehabilitation
- Service performed by an inmate of a penal institution
- Service performed for a railroad which is covered under provisions of the Railroad Unemployment Insurance Act
- Service performed by a student at his/her school, college, or university
- Service performed in the employ of a hospital as a student nurse or intern
- Service performed by an individual under the age of 18 years in the delivery or distribution of newspaper
As a sole proprietor, do I need to report my wages and those of my spouse or my children?
No. Your wages are not covered under District of Columbia unemployment insurance law. The employment of your spouse, and/or your children under 21 years of age is exempt from coverage. If you employ your children who are 21 years of age or older and/or other help, you must report their employment.
Our company is a partnership. Do we need to report our wages?
Wages and/or income of the partners do not need to be reported. If the company employs other non-partner employees, the company would be a liable employer, and the wages of those employees would need to be reported.
Are independent contractors covered under District of Columbia unemployment insurance law?
An independent contractor working as an individual is not subject to coverage under the DC unemployment insurance law.
However, if an individual performing work for you is an employee rather than an independent contractor, you are liable to pay unemployment taxes on the employee's wages. The ordinary rules of common law relative to "master and servant" apply in defining employers and employees. In determining who is an employee and who is an independent contractor, the Department of Employment Services considers the following:
- Who has the right to supervise regarding the means by which the intermediate work should be done?
- What is the method of compensation?
- Is the individual providing service engaged in an independent trade, occupation, profession or business?
If you employ an individual in the District of Columbia without registering with the Department of Employment Services and you are subsequently determined to be a liable employer, you will be responsible for all back taxes, plus interest and penalty, since you began paying wages in DC. If the individual providing service for you might not be an independent contractor, it is to your advantage to call our tax staff at (202) 698-7550 to discuss your situation.
How can I obtain the UI poster-Notice to Employees?
The UI poster can be obtained by calling the general Tax Division telephone number or by clicking on the below attachment.
Office of Unemployment Compensation - Tax Division
Contact Suite #:
Monday to Friday 8:30 am to 4:30 pm