How to Make Your Child an Employee: 4 Essential Steps for Families

Key Highlights

• Review federal and state youth labour laws, noting that minors under 14 generally cannot work non-agricultural jobs.
• Obtain necessary job permits or employment certificates for minors, as required by state laws.
• Understand wage regulations, including potential reduced minimum wages for young employees based on age and job type.
• Document work terms, including hours and pay rates, to ensure compliance with labour laws and avoid penalties.
• Determine fair wages by researching local rates, with California averaging $24.02 and Washington $27.51 for administrative tasks.
• Explore tax benefits, such as FICA tax exemptions for wages paid to minors under 18 and deducting their wages as business expenses.
• Complete necessary employment forms, including Form W-4 and Form I-9, and maintain records for compliance and tax purposes.
• Create a formal work agreement outlining job responsibilities, pay rate, and work hours, signed by both parent and child.
• Regularly review compliance with labour laws and adjust practises as necessary to ensure a safe work environment.

Introduction

Imagine wanting to teach your child the value of hard work, only to feel lost in a maze of rules and regulations. Navigating the complexities of youth employment can be overwhelming for parents eager to instill a strong work ethic in their children. This guide outlines four essential steps to legally employ your child, ensuring compliance with labor laws while reaping potential tax benefits. But what if the rules feel overwhelming and confusing? By understanding these regulations, you can turn this challenge into a rewarding experience for your family.

Understand Legal Requirements for Hiring Your Child

Navigating the maze of youth employment laws can feel overwhelming for parents. Here are some steps to help you understand the legal requirements governing youth employment in California and Washington:

1. Check Federal and State Laws: It’s important to review the Fair Labor Standards Act (FLSA) alongside your state’s youth labor laws. Typically, youngsters under 14 can’t engage in non-agricultural employment, while those aged 14-15 face limitations on their shifts and types of tasks. For instance, minors aged 14 and 15 can work a maximum of 40 hours during a non-school week, but only 18 hours in a school week. They can work no more than 3 hours on a school day and up to 8 hours on a non-school day.
2. Obtain Necessary Permits: Depending on your state, you may need to secure a job permit or employment certificate for your child. In California and Washington, around 40 states require minors to obtain such certificates before starting work, which verifies their age and eligibility.
3. Understand Wage Regulations: Familiarize yourself with the minimum wage laws applicable to minors. Some states allow a reduced minimum wage for young employees, which can vary based on the job type and the minor’s age.
4. Document Work Terms: It’s a good idea to keep a written record of what your child’s job entails, including their hours and pay rate. This documentation is crucial for ensuring clarity and compliance with labor laws. Violations can lead to penalties reaching up to $15,138 per minor for serious infractions. Also, be aware that minors can’t work in hazardous occupations, which include jobs involving heavy machinery and certain chemicals.

By following these steps, you can ensure your child’s safety and compliance. This not only protects them but also opens doors to valuable experiences.

Define Job Roles and Responsibilities

Research Fair Compensation and Tax Benefits

Many parents feel uncertain about how to fairly compensate their children for work, yet understanding this can lead to significant benefits for the whole family. Here’s how to approach this:

1. Determine Fair Wages: Research the going rate for similar jobs in your area. In California, the average hourly wage for administrative tasks is approximately $24.02, while in Washington, it varies around $27.51. Make sure the pay is reasonable and reflects the work being done.
2. Explore Tax Benefits: Imagine the relief of knowing that hiring your kids can actually save you money on taxes. Wages paid to minors under 18 are often exempt from FICA taxes, leading to significant savings. Plus, you can deduct their wages as a business expense, which lowers your taxable income. This strategy is similar to what families like Allison and Brian experienced with Bright Advisers, where they learned how effective tax planning could enhance their financial situation.
3. Set a Pay Structure: Decide whether to compensate your offspring hourly or with a flat rate for specific tasks. Ensure that this structure aligns with the work they will be doing, keeping in mind that compensation must be reasonable and comparable to what non-family employees would earn.
4. Document Payments: Keep accurate records of payments made to your offspring. This documentation is essential for tax purposes and helps maintain transparency in your financial dealings. Accurate records, such as timesheets and job descriptions, are crucial to validate the work status.

When you take the time to research fair compensation practices, you’re not just helping yourself; you’re also teaching your children valuable lessons about work and responsibility while benefiting from tax savings. Reaching out for support can empower your family to make informed financial decisions together.

Complete Employment Documentation and Compliance

Navigating the hiring process for your child can feel overwhelming, but it’s essential to ensure everything is done right. Let’s start by completing the necessary forms together:

1. Complete Necessary Forms: Your dependent must fill out a Form W-4 for tax withholding and a Form I-9 for verification of eligibility to work. Make sure to complete any state-specific forms needed for youth work in California or Washington. Remember, the edition date for the current Form I-9 is 01/20/25, and previous editions are valid until their respective expiration dates. Plus, you’ll need to keep Form I-9 for three years after hire or one year after termination.
2. Create a Work Agreement: It’s a good idea to draft a formal contract that outlines the terms of the position, including job responsibilities, pay rate, and work hours. Both you and your child should sign this document to formalize the work relationship.
3. Maintain Records: Keeping copies of all employment documents, including the job description, performance evaluations, and payment records, is crucial. This documentation is essential for tax purposes and compliance with labor laws, especially considering the increased penalties for violations that could lead to serious injury or death of a minor, which can reach up to $71,000.
4. Review Compliance Regularly: It’s important to periodically assess your compliance with labor laws and adjust your practices as necessary. This means confirming that you have secured the necessary minor employment permit endorsements and conducted safety consultations with the Washington State Department of Labor & Industries (L&I) before allowing your child to engage in certain roles. Ensure compliance with all statutory and regulatory requirements when utilizing expanded hours.

By taking these steps, you’re not just following the law; you’re creating a safe and supportive work environment for your child.

Conclusion

Imagine the pride of teaching your child responsibility while also securing their financial future. Navigating the process of employing your child can be a rewarding experience that fosters responsibility and financial literacy. When you understand the legal requirements and define clear job roles, you create a structured environment that benefits everyone in the family. This approach not only adheres to regulations but also instills valuable work ethics in young individuals.

Key insights from this guide emphasize the importance of:

1. Familiarizing yourself with federal and state labor laws
2. Obtaining necessary permits
3. Documenting all employment-related activities

Additionally, exploring tax benefits and fair compensation practices can lead to significant financial advantages for families. By taking these steps, you can ensure a safe and productive work experience for your children while enhancing your own financial strategies.

Think of it as a chance to nurture your child’s sense of responsibility and work ethic, skills that will benefit them for years to come. Embracing this approach can lead to meaningful family interactions and financial benefits. If you’re ready to make informed decisions about your family’s financial future, we’re here to help you every step of the way.

Frequently Asked Questions

What are the federal and state laws regarding youth employment?

Parents should review the Fair Labor Standards Act (FLSA) along with their state’s youth labor laws. Generally, children under 14 cannot engage in non-agricultural employment, while those aged 14-15 have restrictions on their shifts and types of tasks. For example, minors aged 14 and 15 can work a maximum of 40 hours during a non-school week, but only 18 hours during a school week, with a limit of 3 hours on school days and up to 8 hours on non-school days.

Do I need a permit to hire my child for work?

Yes, in California and Washington, as well as in about 40 other states, you may need to obtain a job permit or employment certificate for your child before they start working. This certificate verifies their age and eligibility for employment.

What are the wage regulations for minors?

It is important to understand the minimum wage laws that apply to minors, as some states allow a reduced minimum wage for young employees. The minimum wage can vary based on the job type and the minor’s age.

Should I document my child’s work terms?

Yes, it is advisable to keep a written record of your child’s job details, including their hours and pay rate. This documentation is essential for ensuring clarity and compliance with labor laws, as violations can result in penalties of up to $15,138 per minor for serious infractions.

Are there any restrictions on the types of jobs minors can perform?

Yes, minors are prohibited from working in hazardous occupations, which include jobs involving heavy machinery and certain chemicals. It is important to ensure that the work environment is safe for your child.

List of Sources

1. Understand Legal Requirements for Hiring Your Child
   • Child-Labor Law: FLSA Rules, State Limits, & 2026 Penalties | AllVoices (https://allvoices.co/glossary/child-labor-law)
   • Child Labor Laws | OSHA Education Center (https://oshaeducationcenter.com/articles/child-labor-laws)
   • Fact Sheet #43: Child Labor Provisions of the Fair Labor Standards Act (FLSA) for Nonagricultural Occupations (https://dol.gov/agencies/whd/fact-sheets/43-child-labor-non-agriculture)
   • Child Labor (https://dol.gov/agencies/whd/child-labor)
   • The Fair Labor Standards Act (FLSA) Child Labor Provisions (https://congress.gov/crs-product/R44548)
2. Define Job Roles and Responsibilities
   • 50+ Tasks to Pay Your Kids By Age: IRS-Compliant Jobs (2026) (https://kidspayroll.com/blog/legitimate-tasks-to-pay-kids)
   • Chores that kids can actually do, age by age – ParentsTogether (https://parents-together.org/chores-for-kids-age-by-age)
   • Why Should You Define Job Roles Within Your Family Business? (https://fnbo.com/insights/commercial-business/2024/why-should-you-define-job-roles-within-your-family-business)
   • Children, Chores and Responsibility: What Jobs for Which Ages? (https://avera.org/balance/childrens-health/children-chores-and-responsibility-what-jobs-for-which-ages)
   • Defining and Documenting Roles in a Family Business | Davis Wright Tremaine (https://dwt.com/blogs/family-business-resource-center/2021/02/defining-roles-in-a-family-business)
3. Research Fair Compensation and Tax Benefits
   • Tax Benefits of Employing Your Children in Your Business (https://merceradvisors.com/taxes/tax-benefits-of-employing-your-children-in-your-business)
   • Administrative assistant salary in California (https://indeed.com/career/administrative-assistant/salaries/CA)
   • New Tax Benefits of Hiring Your Kid (https://portebrown.com/newsblog-archive/new-tax-benefits-of-hiring-your-kid)
   • These Are The 10 States With The Highest Administrative Assistant Salaries For 2017 (https://zippia.com/advice/administrative-assistant-salary-by-state)
   • Administrative Assistant Salary: What’s Fair in 2026? (https://wingassistant.com/blog/administrative-assistant-salary)
4. Complete Employment Documentation and Compliance
   • Washington Expands Minor Work Hours and Strengthens Safety Requirements | Davis Wright Tremaine (https://dwt.com/blogs/employment-labor-and-benefits/2026/03/washington-minor-work-hours-and-safety-rules)
   • How to Hire Minors (https://lni.wa.gov/workers-rights/youth-employment/how-to-hire-minors)
   • Employment Eligibility Verification (https://uscis.gov/i-9)
   • Fact Sheet 13: Employment Relationship Under the Fair Labor Standards Act (FLSA) (https://dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship)
   • Selected State Child Labor Standards Affecting Minors Under 18 in Non-farm Employment as of July 15, 2025 (https://dol.gov/agencies/whd/state/child-labor)

Written by

Kevin Luu

Co-Founder and Chief Learning Officer, Bright Advisers

Kevin has advised high-income W-2 tech and biotech families since 2015, and leads the education-first Age Five Family Office from Brea, California.

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