Early Childhood Educator Pay Equity Fund
Last Revised: December 17, 2025
- Issue Areas
- Early childhood Financial security
Program overview
Addressing pay disparities and retention issues: In 2021, the D.C. City Council created the Early Childhood Educator Pay Equity Fund, managed by the D.C. Office of the State Superintendent of Education (OSSE). The Pay Equity Fund provides for increased compensation for early childhood educators, with the aim of improving workforce retention and expanding the availability of early childhood services.
Creating a new and sustainable funding source: The success of the Pay Equity Fund is directly connected to new revenues generated by increased income tax rates on D.C. residents earning more than $250,000 annually. Funds go into a dedicated account managed by OSSE and cannot be used for another purpose. The arrangement has helped sustain funding for the program over time.
Providing for increased compensation: The Fund enables increased compensation for both assistant and lead early childhood teachers (but not non-teaching administrators) who are licensed and work at either home-based or center-based providers. Initially, in FYs 2022-2023, the Fund issued payments directly to educators to supplement their wages. For full-time teachers, these were $10,000 for assistant teachers and $14,000 for lead teachers. Beginning in FY 2024, the program model shifted. As part of the new approach, early childhood providers opt into the program and receive payments that are then delivered to educators through the traditional payroll process.
Ensuring affordable access to health insurance: By introducing wage subsidies, the Fund created the risk of a “benefits cliff,” in which educators who previously qualified for Medicaid coverage would become ineligible as their incomes rose. To address this problem, and the broader issue of high healthcare costs experienced by early childhood educators, OSSE introduced health insurance premium subsidies for participating early childhood educators in 2023. OSSE archives this through the HealthCare4ChildCare program and a partnership with the federal health benefits exchange.
- Strategies
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Early childhood workforce supports
- Location
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Washington, D.C.
One study suggests that the DC Pay Equity Fund is a promising strategy for increasing employment and retention rates for early childhood educators.
A 2024 quasi experimental study found that after two years, the DC Pay Equity Fund resulted in a 7 percent increase in employment in the early childhood sector relative to estimated figures without the program. However, the number of facilities did not appear to increase, suggesting that the PEF was most effective at helping existing providers fill vacancies or expand operations. The authors estimated that this sector-level increase in employment led to approximately 1,500 additional child care slots. (Note: this study examined the initial PEF model, in which subsidies were provided directly to early childhood educators.)
Creating a coalition to plan the Pay Equity Fund: In 2021, the D.C. City Council created the Early Childhood Educator Equitable Compensation Task Force. Task force members included early childhood educators and center directors, parents, and policy experts. They played a key role in identifying workforce issues for early educators and providing recommendations, including wage subsidy levels depending on role and professional credentials, that became the wage scale for the Pay Equity Fund.
Partnering with early education providers: OSSE engaged with early education providers to communicate the benefits and conditions of opting into the Pay Equity Fund program. OSSE also worked closely with providers to design efficient processes to deliver wage subsidies through each providers’ payroll systems.
Integrating program administration to support fast implementation: To ensure seamless implementation, OSSE integrated the Pay Equity Fund administrative activities into existing systems and teams. For example, the agency’s early education provider licensing team played a key role in quickly implementing the program since only licensed providers can benefit from the Fund.