With business laws continuously changing, it’s hard to keep up with all of the federal rules and regulations for running a business.
What do I have to do and what is optional? How do I handle payroll for a student intern? What paperwork should I file if I employ my own child?
With a tight job market, many of you might be interviewing for new employees for part-time help now. Whether it is a full-time seasonal employee, a part-time student intern, or your own family member, there are some important things to keep in mind as you hire short term help.
Things to Remember:
For 100% Parent Owned Entities Employing their Children:
- If the parent owns 100% of the business, the owners’ children may work any number of hours or any time of day. Children under 16 years of age are not permitted to do hazardous work, work where food is cooked, or work near flammable or hazardous materials
- 100% owners hiring only immediate family are not required to pay minimum wage. BUT if they regularly employ others minimum wage must be met, even for family.
- Wages are exempt from FUTA if owners’ children are under 21.
- If the owners’ children are under 18, wages are exempt from FICA but FIT must be withheld on W-2s filed for children.
For Other Summer Employees:
- For other employed children under the age of 18, obtain an age certificate recognized by the U.S. Department of Labor and your state Wage and Hour Division (WHD). This is to be returned to the workers at time of termination; these workers may not do hazardous work.
- Other children ages 14-15 are permitted to work 8 hours/day, 40 hours/week, June 1- Labor Day, between 7 a.m. – 9 p.m., if school is not in session. These limits do not apply to news carriers or children employed by a parent who is the 100% owner of the business.
Children under 14 cannot be hired, unless hired by a parent who is the sole owner.
• Pay for a holiday is optional for part-time and summer help.
• No paid vacation time is required. However, if one chooses to give paid vacation time some federal and states laws apply.
• Providing health insurance or other benefits to temporary or part-time employees is optional. If these benefits are not offered, however, it should be stated in a written benefits plan.
• A Federal W-4 should be obtained from all summer employees, including seasonal workers, part-time, and foreign students.
• One should withhold FIT (Federal Income Tax) from all summer employees unless their W-4 results in no withholding.
• FICA should be withheld from all workers, even those who receive Social Security benefits and high school students. (students under 18 working for sole-owner parents are exempt from this)
• Overtime is due for any time worked past 40 hours in the workweek, but is not required for paid time-off.
• And don’t forget that you may be eligible for 6.2% HIRE exemption from employer Social Security tax on the wages of summer help.