2019 Federal Rules and Regulations on Hiring
Owners’ children (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 the minimum wage. Caution: If even some regularly employed workers are not family, pay even family members the minimum wage.
Owners’ children under 21
- Wages are exempt from FUTA.
Owners’ children under 18
- If the business is 100% parent-owned, the children under 18 are exempt from FICA.
All children under 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.
- These workers may not do hazardous work.
Workers aged 14-15 not owners’ children
- 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.
Other children under 14
- Cannot be hired unless they work for a parent/ sole owner. All employees (including owners’ children)
- Obtain a W-4. Even from owners’ children, student part-timers and foreign students.
- Withhold FITW. Even from owner’s spouse or child, unless a W-4 claims exempt.
- Withhold FICA. Even from high school students and those receiving SS benefits. Exception: Children under 18 working for sole-owner parents.
- Pay overtime for hours actually worked over 40 hours in the workweek. You are not required to include paid time off (holiday or vacation day hours). Do not substitute paid nonwork hours for overtime hours—i.e., make all hours straight time—to avoid overtime pay.
Example: Maria works 12 hours a day the first 4 days of the workweek, but not on the 5th day, a holiday, for which she is paid for 8 hours. She is correctly paid 40 hours’ straight time + 8 hours’ overtime + 8 holiday (nonwork) hours. Maria’s employer cannot substitute the 8 hours’ holiday pay for the 8 hours’ overtime to avoid paying the overtime rate. Paid holidays and vacations
- Under federal law, paid holidays for part-time and summer help are optional, just as for regular employees—but check state law.
- Paid vacation not required. But if you normally offer paid vacation, some federal and state laws apply.
- Temps and part-timers. Benefits are optional, but if offered, should be explained in a written benefits plan. Always check your state’s laws.
Vacation pay journal entries
Summer help is usually hired to fill in for employees when they go on vacation. Here are the journal entries for employees who accrue, then receive paid vacation:
Accrued Vacation Expense xxx
Vacation Payable xxx
To accrue vacation pay for the period Record distribution of vacation pay as follows:
Vacation Payable xxx
To distribute vacation pay