Employing your children
Q: I'd like to hire my 13-year-old daughter to work after school in my practice. I'd put her wages in a college fund. Does she need a work permit? Do I need to pay her minimum wage? Are there restrictions on the hours she can work?
The federal Fair Labor Standards Act prohibits you from employing children under the age of 14, unless they're your own children working in a family-owned business, says Kerry Richard, JD, a lawyer with Tobin, O'Connor, Ewing & Richard in Washington, D.C. "This exception only applies if you and/or your spouse are the owner(s)," she says. "If you are one of several shareholders, or if you're employed as an associate, you can't put your daughter to work."
Even if you are the owner, Richard cautions that you should check your state laws before you put your daughter on the payroll. Many states have child-labor provisions that are more restrictive than federal law, and you must comply with the most restrictive provisions."Under federal law, there also are certain jobs, such as working with radioactive substances, that children under the age of 18 can't do," Richard says. Again, many state laws have additional restrictions, she says. For example, some states prohibit minors from doing jobs that may expose them to certain machinery; chemicals; or dangerous animals, such as bulls or stallions.
Assuming you live in a state that permits minors to hold the job you'd like your child to do, you probably do need a work permit, Richard says. "And there are restrictions on the hours children under 16 can work," she says. "Federal law prohibits them from working before 7 a.m. or after 7 p.m. on a weekday when school is in session, and they can't work more than three hours per weekday during the school year. Frequently states are even more restrictive."
In terms of pay, you may be exempt from federal minimum wage requirements until your daughter turns 16, but because you're interested in saving for college—and because your state law may not offer the same exemption—you should consider paying minimum wage. Some states have higher or lower minimum wage requirements than the federal government, and if you aren't exempt from paying, you must pay the higher amount.
"You should pay the wages to her, rather than directly into a college fund account," Richard says. "Every state has laws requiring payment of wages to employees, and there are no age or family-based exemptions to these rules."
Of course, as her parent, you can make your daughter put his paychecks in a savings account, Richard says. "But as a business owner, you want the paper trail to show that you paid the proper amount for all time worked by every employee and that you withheld the required taxes," she says.