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With summer drawing ever nearer, many employers will hire youth to help with the influx of business needs. It is important to remember that there are several federal regulations that govern hiring workers under age 18.
2023 Federal Rules and Regs
Part-timer and temp benefits
Paid holidays for part-time and summer help are optional under federal law, just as for regular employees—but check state law.
Paid vacation is not required, but if normally offered, some federal and state laws apply.
Actual benefits are optional—but if offered, the benefits should be spelled out in a written benefits plan.
Businesses 100% owned by the parents
Owners’ children of any age
Can work any number of hours or time of day. If under 16, cannot do hazardous work (e.g., use lawn mowers, sewing machines, or work near flammable or hazardous materials, or where food is cooked).
If all employees are immediate family, owners’ children need not be paid minimum wage. Caution: If even some regular employees are not family, you are required to pay family members the minimum wage.
Owners’ children: under age 21
Wages are exempt from FUTA.
Owners’ children: under age 18
If the business is 100% parent-owned, the children under 18 are exempt from FICA.
Not the owners’ children
If under age 18
If not the owners’ children, obtain an age certificate that is recognized by both the U.S. Department of Labor (DOL) and your state Wage and Hour Division (WHD). DOL often accepts state age certificates, but ask your state or local WHD to be sure. Return the certificate to the worker at termination.
If aged 14-15
Can work 8 hrs./day, 40 hrs./wk., June 1-Labor Day, between 7 a.m. and 9 p.m., if school is not in session. Exceptions: Limits do not apply to news carriers or children who are employed exclusively by a parent/sole proprietor. For agricultural jobs, contact the DOL.
If under age 14
Cannot be hired unless they work for a parent/sole owner.
All employees (including an owner’s child)
Always obtain a W-4. Even from the owners’ children, student part-timers and foreign students.
Always withhold FITW. Even from an owner’s spouse or child, unless a W-4 claims exempt.
Always withhold FICA. Even from high school students and those receiving SS benefits. Exception: children under 18 working for soleowner parents.
Always pay overtime for hours actually worked over 40 hours in the workweek. You are not required to include paid time off (holiday or vacation hours). Do not substitute paid nonwork hours for overtime hours—i.e., make all hours straight time to avoid overtime pay. Example: Kwan works 12 hours a day for the first 4 days of the workweek, but not on the 5th day, a holiday, for which he is paid for 8 hours. He is correctly paid 40 hours’ straight time + 8 hours’ overtime + 8 holiday (nonwork) hours. Kwan’s employer cannot substitute 8 hours’ holiday pay for the 8 overtime hours to avoid the overtime rate.
Always check your state’s laws too.
Legal Disclaimer: This post contains general information for taxpayers and should not be relied upon as the only source of authority. Taxpayers should seek professional tax advice for more information. This information was current at time of posting; we are not responsible for updating this or any blog post/article for subsequent changes in the law or its interpretation.
Certain content on this page is copyright © 2023 The General Ledger (May 2023, Vol. 40, No.5) a publication of the American Institute of Professional Bookkeepers. All Rights Reserved for applicable content. Used with permission.
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