Employment tax rules
- Obtain W-4s from all employees—owners’ children, student part-timers and foreign students.
- Withhold FITW from all employees, including the owner’s spouse or child, unless a W-4 claims exempt.
- Withhold FICA from all employees, even high school students and those receiving SS benefits. Exception: Children under 18 working for sole-owner parents.
Workers under 18 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.
- May not do hazardous work.
- Withhold FICA.
Workers aged 14-15 not owners’ children
Can work 8 hrs./day, 40 hrs./wk., June 1-Labor Day, between 7 a.m.-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.
Overtime
Pay overtime for hours actually worked over 40 hours in the workweek. You are not required to include as hours worked paid time off (holidays, vacation days). Do not substitute paid nonwork hours for work hours to make all hours straight time, thus avoiding overtime pay.
Example: Lee works 12 hours a day the first 4 days of the workweek, but not on the 5th day, a holiday, for which he is paid for 8 hours. He is correctly paid 40 hours’ straight time + 8 hours’ overtime + 8 holiday (nonwork) hours. Lee’s employer cannot substitute the 8 hours’ holiday pay for the 8 hours’ overtime to avoid paying the overtime rate.
Paid holiday and vacation requirements
Under federal law:
- paid holidays for part-time and summer help are optional—as they are for all employees—but check state laws.
- paid vacation is not required—but if you give paid vacation, some federal and state laws apply.
Fringe benefits
Temps and part-timers. Fringe benefits are optional, but if offered, should be explained in a written benefits plan.
Children under 14
Cannot be hired unless they work for a parent/sole owner.
Always check your state’s laws.
