Hiring minors in a small business is a bigger responsibility than many owners realize. Business owners often know the rules for hiring their spouse or their own children, but hiring people under 18 who aren’t your children has a different set of federal and state requirements. In this post, I’m walking through the tax, payroll, and labor rules you need to know before hiring young workers for summer or part-time roles.
Tax Rules for Hiring Minors Who Aren’t Your Children
The IRS treats teen workers like any other employee. That means you must collect a completed W-4 from every worker, including part-time or seasonal student employees. You will still withhold federal income tax unless the worker claims exemption. A teen can only claim exemption if they had zero tax liability last year and expect zero this year.
You must also withhold and pay FICA taxes (Social Security and Medicare) for workers under 18. The only exception to this rule applies when the child is your own and you are the sole proprietor. For all other minors, standard payroll taxes apply.
Labor Rules for Hiring Workers Under 18
Child labor laws restrict the type of work minors can do as well as the hours they are allowed to work. If your worker is under 18, you may need an age certificate that is recognized by both the U.S. Department of Labor (DOL) and your state’s Wage and Hour Division (WHD). Many states issue these certificates, and the DOL typically accepts them. At the end of employment, you must return the certificate to the worker.
Minors may not perform hazardous work. As long as the tasks do not involve heavy equipment, dangerous machinery, or chemicals, the job is generally permissible. Note that agricultural work has its own set of rules, so check those separately if they apply.
Rules for Workers Under Age 14
If the worker is not your child and you are not the sole owner of the business, you cannot hire them under federal law. This age group is off-limits unless it is a family-owned business with children working for their parent.
Rules for Workers Aged 14–15
Workers in this age group can work:
- Up to 8 hours per day
- Up to 40 hours per week
- Between 7 a.m. and 9 p.m. from June 1 through Labor Day
These extended hours apply only during the summer break period.
Compensation Rules
Paid vacation is optional, but if you choose to offer it, you must follow state rules and apply your policy consistently. Paid holidays for summer or part-time workers are also optional. Any fringe benefits you offer should be included in a written benefits plan.
Overtime must be paid for all hours actually worked over 40 in a week. You are not required to count paid time off toward overtime calculations.
Where I Can Help
For legal interpretations of labor laws, an employment attorney is your best resource. But for bookkeeping support—payroll setup, tax withholding accuracy, documentation, and keeping your records organized—I can absolutely help. Many owners save more than 80 hours a year by outsourcing this part of their business. If you want your payroll and bookkeeping handled cleanly and accurately, schedule your bookkeeping strategy call with me and start the process.