Small-business owners may want to utilize as much help from family as possible when operating their business, but it’s important to recognize all laws and regulations when it comes to employing minors.
Business owners must follow federal guidelines, as well as state-specific guidelines. Many of these rules went into effect during the early 20th Century when young children worked in textile mills and factories. These laws dictate everything from the age of the worker to the hours he or she can work to whether payroll taxes are applicable.
In Iowa, the rules depend upon the age of the child. Those 16 and 17 are prohibited from doing certain dangerous tasks and occupations, according to Iowa Workforce Development, while those ages 14 and 15 have additional restrictions and limits on the time and hours they can work and must have a work permit. These limits on hours and time ensure the child is not working during school hours. For a full list of regulations, visit www.iowadivisionoflabor.gov.
The federal Fair Labor Standards Act (FLSA) also provides certain exemptions. Minors younger than 16 who work in a business solely owned or operated by their parents can work any time of day or for any number of hours, according to the U.S. Department of Labor.
However, children and minors younger than 18 are prohibited from working in manufacturing, mining, operating power-drive equipment or other occupations the Secretary of Labor deems as hazardous.
When there is a discrepancy between federal and state law, business owners must abide by law that gives the most protection, according to workforce development.
Family businesses are generally exempt from the labor department’s restrictions on the number of hours the owner’s children are permitted to work, but state law limits the time and hours to ensure the child doesn’t miss school.
The business owner also cannot require their child, ages 14-17, to work a job that exposes him or her to dangerous conditions such as standing on a ladder or scaffold, roofing or performing work at an elevated level.
Youth must be paid at least the federal hourly minimum wage of $7.25. Business experts say to pay children the same overtime pay as is paid to other employees at 1.5 times the base pay after 40 hours in a work week.
Any family member should receive the same paid holidays, sick time and paid vacation as other employees. If they qualify for other benefits such as health coverage, then they must receive that as well.
While hiring a family member may seem like a good idea, it can create employment and tax situations. Business owners are encouraged to treat their children and any other family member like other employees and receive the same benefits.
The business owner should check to see what types of payroll taxes they must withhold and pay to employ
their children. The amounts can differ depending on the type of business, according to the Internal Revenue Services. Learn more at www.irs.gov. Click on file, then business and self-employed, then small business and self-employed, and then family help. ♦
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