Answer: están lavando
Explanation: the subjects are manuel and his sister, or ellos/ustedes
for ellos/ellas/ustedes, you would use están
general rule:
<u>yo/I:</u> estoy
<u>tú/you:</u> estás
<u>ello, ella, usted/he, she, they (singular),you(formal):</u> está
<u>nostros, nosotras/we</u>: estamos
<u>ellos, ellas, ustedes/they (plural):</u> están
there is also estáis (vosotros/y'all), but it's used mainly in Spain
