While there are no laws against hiring family members in private businesses, having your child (or any child) working in your family business presents unique challenges and there are some key laws that you must know before hiring a minor.

Child Labor Laws

The key federal law on hiring minors as employees is the Fair Labor Standards Act (FLSA), which establishes minimum wage, overtime pay, recordkeeping, and youth employment standards. The FLSA's goal is to protect children from working in harsh conditions by prohibiting the employment of oppressive child labor.

The FLSA generally prohibits employment of children under the age of 16 in non-hazardous occupations and the employment of children under 18 years old in hazardous occupations. A child under the age of 14 cannot be employed unless federal law explicitly provides for an exemption. For example, children under 14 can be employed by their parents in a non-hazardous occupation.

Age Verification

Though the federal government does not require proof-of-age certificates, many states do require them for workers under a certain age. It is essential to determine the minor's age.

You should not rely on the child to tell you about their correct age—instead, you should ask for an ID that provides age confirmation. This could be a driver's license, birth certificate, or other reliable document. Knowing the child's age is necessary to determine which restrictions apply to their employment. You will also need this information in the event of an inspection or audit.

Work Permits

The FLSA does not require children to have a work permit or working papers. Many states, however, do require minors to have a work permit. Work permits are generally issued by school guidance counseling offices and state labor departments.

Minimum Wage

The FLSA allows employers to pay employees who are under 20 years of age a lower minimum wage for up to 90 calendar days of employment. During this 90-day period, the minor employee must be paid a minimum of $4.25 per hour. After 90 days of employment, the employee, regardless of age, must receive the standard applicable minimum wage.

Employers cannot take any action that would replace existing employees with others at the youth minimum wage. Displacement of employees, such as reducing the employees' hours, wages, or benefits, is also prohibited.

Employment Benefits for Children

It is important to clearly document the status of the minor employee. Explicitly defining their status as part-time or seasonal worker can help avoid confusion regarding their benefits.

You are required to provide all the qualifying benefits to the minor employees. For example, you must comply with FLSA's overtime provisions.

Hiring Your Own Children

Certain occupations and work arrangement are not covered by the FLSA. For example, a child who works for a parent in any occupation besides manufacturing, mining, or hazardous work can be employed at any age and for any number of working hours.

Strictly following the FLSA requirements is crucial. Employers who violate the FLSA child labor provisions may be subject to civil penalties. Criminal penalties are also prescribed for willful violations of the FLSA's child labor laws. In addition to federal law, you should know the applicable state laws as each state has its own child labor laws.