Hiring Your Children

Marcia Bagnall, SBDC Director
It’s a long-standing tradition for business owning families to employ their children, especially in the summer months. There are plenty of excellent reasons to employ your children. It keeps them busy, teaches them important life skills about work and money, and provides you with an inexpensive labor source. Additionally it may confer tax benefits to you (check with your tax professional about your individual situation).
It’s legal to employ your children in Oregon, but you’ll need to pay attention to both state and federal laws that apply to hiring children, even your own. There are numerous federal laws, but many of them don’t apply when you are hiring your own child. State laws, however can be a different matter. In Oregon these are stricter than federal law.
When federal and state laws conflict, the law that is the most restrictive or protective is the one that must be complied with. In other words, you must apply the tougher of the two standards. How do you find out about those laws? Your first move is to go to the Bureau of Labor and Industries (BOLI) website (www.boli.state.or.us) and click on the links that pertain to child labor laws. There’s a Frequently Asked Questions section and also a phone number you can call to ask further questions.
Protecting children is the purpose of child labor laws. Generally speaking the laws pertain to two basic areas: the number of hours children can work, and the types of work they are allowed to do. Even though a young person is a member of your family, you don’t have unlimited decision making power as to what they can do in your company, so be sure to understand the laws prior to engaging your children as employees.
The laws also specify that the work you pay your children to do must be actual business tasks and they must be qualified to perform them. This means that you would be hiring someone else to perform these tasks if you didn’t hire your child. In other words, the job must be real.
Use the same tools with your children that you would use for other employees, have them fill out time sheets and pay them with checks attached to a pay stub. Create a written job description to substantiate your need for their services.