Child Labor Laws for Family Business: Exemptions and Hazard Limits

Child labor laws for a family business hinge almost entirely on one question: how is the business legally organized? If you operate as a sole proprietorship, or as a partnership in which both partners are the child’s parents, federal law lets you employ your own children with very few restrictions. If the business is a corporation, or an LLC or partnership that includes any non-parent owner, your children are treated like any other minor employee, and the full set of federal age, hour, and task rules applies.1Federal Register. Child Labor Regulations, Orders and Statements of Interpretation The mistake is common and expensive: federal civil penalties reach $16,035 per child per violation.2eCFR. 29 CFR Part 579 – Child Labor Violations—Civil Money Penalties

What the Parental Exemption Actually Covers

Under the Fair Labor Standards Act, a parent (or someone standing in the place of a parent, such as a legal guardian or foster parent) may employ their own child in any occupation, at any age. Two guardrails remain in place. Children under 16 cannot work in manufacturing or mining. Children under 18 cannot work in any occupation the Secretary of Labor has declared hazardous.3eCFR. 29 CFR Part 570 – Child Labor Regulations, Orders and Statements of Interpretation Outside those two, the federal age floors, hour caps, and time-of-day rules that normally govern young workers fall away.

The exemption also requires that the child be employed exclusively by the parent. If your child helps with tasks you’re doing for another business, the Department of Labor treats the child as jointly employed, and the exemption disappears.4eCFR. 29 CFR 570.126 – Parental Exemption

Why Business Structure Decides Everything

The exemption belongs to the parent as employer, not to the family as a group. The Department of Labor has stated plainly that “employment by a partnership or a corporation would not fulfill the [parental] exemption requirement unless the partnership was comprised of the child’s parents only or the corporation was solely owned by the parent or parents.”1Federal Register. Child Labor Regulations, Orders and Statements of Interpretation

So an S-corp restaurant run by the family, an LLC with a non-parent investor, or a partnership that includes an aunt, a friend, or a business partner does not qualify, even if the parents run daily operations. In those setups, every standard federal child labor rule applies to your children exactly as it would to any teenager off the street.

The Rules When the Exemption Does Not Apply

If your business is incorporated or has non-parent owners, here is what governs your child’s work.

Age Floors

Children under 14 generally cannot work in non-agricultural jobs. At 14 and 15, they may work but under tight restrictions. At 16, most restrictions lift, except that hazardous work stays off-limits until 18.3eCFR. 29 CFR Part 570 – Child Labor Regulations, Orders and Statements of Interpretation

Hours for 14- and 15-Year-Olds

Work must fall outside school hours, and the caps are strict:5U.S. Department of Labor. Fact Sheet #43: Child Labor Provisions of the Fair Labor Standards Act

At 16, these hour and time-of-day caps disappear.

Permitted Tasks for 14- and 15-Year-Olds

Federal regulations list what younger teens may do: cashiering, stocking, price tagging, order assembly, and limited kitchen work such as running dishwashers, toasters, and microwaves used only to warm food that does not exceed 140°F.3eCFR. 29 CFR Part 570 – Child Labor Regulations, Orders and Statements of Interpretation The pattern is to keep this age group away from dangerous equipment.

Hazardous Work Is Off-Limits Regardless of Structure

Seventeen federal Hazardous Occupation Orders prohibit anyone under 18 from certain kinds of work, and the parental exemption does not override them. The categories most likely to come up in a family business include:7U.S. Department of Labor. Hazardous Occupations – elaws – FLSA – Child Labor Rules

If your family restaurant has a commercial slicer, or your shop has a table saw, a 16- or 17-year-old child cannot operate it even if you own the business outright.

Driving for the Business at 17

Sixteen-year-olds cannot drive as part of their job at all. At 17, a narrow federal exception permits limited driving, but every one of the following must be true at once:3eCFR. 29 CFR Part 570 – Child Labor Regulations, Orders and Statements of Interpretation

  • The vehicle weighs 6,000 pounds or less
  • Driving happens only in daylight
  • The teen has a valid state license, no moving violations at hire, and has completed a state-approved driver education course
  • The vehicle has seat belts and the employer instructs their use
  • No towing, no route sales, no passengers for hire, no urgent time-sensitive deliveries
  • No more than two trips per day away from the main workplace, and all driving stays within a 30-mile radius
  • Driving is occasional and incidental (no more than one-third of the workday or 20 percent of the workweek)

Miss any one of these and it becomes a hazardous-work violation. Frequent deliveries, longer routes, or heavier trucks put a 17-year-old outside the exception.

Farms Follow Different Rules

If the family business is a farm, the framework changes. On a farm owned or operated by a parent, children under 16 may work at any time with no hour restrictions, and the 17 non-agricultural hazardous orders discussed above do not apply.9eCFR. Subpart G – General Statements of Interpretation of the Child Labor Provisions of the FLSA – Exemptions Agriculture has its own separate set of hazardous orders covering things like operating tractors and handling certain pesticides. Immediate family members working on a parent’s farm can also be exempt from federal minimum wage and overtime.10eCFR. 29 CFR Part 780 – Exemptions Applicable to Agriculture State agricultural rules can be stricter.

Tax Benefits of Employing Your Own Child

When the business is a sole proprietorship or a partnership in which both partners are the child’s parents, hiring your child produces real payroll tax savings:11Internal Revenue Service. Family Employees

  • Wages paid to a child under 18 are exempt from Social Security and Medicare taxes
  • Wages paid to a child under 21 are exempt from Federal Unemployment Tax

These exemptions vanish the moment the business becomes a corporation or brings in a non-parent partner. In those structures, your child’s wages are subject to FICA and FUTA like anyone else’s.11Internal Revenue Service. Family Employees

Income tax adds another layer. For tax year 2026, a dependent child can earn up to $16,100 in wages and owe no federal income tax, thanks to the standard deduction.12Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 The wages are deductible to the business, so income moves from the parent’s higher bracket to the child’s lower one. The work must be real and the pay must match the tasks; the IRS scrutinizes arrangements that look like income-shifting with no substance behind them.

State Work Permits

Federal law does not require work permits for minors, but many states do, and the rules vary. Typical state processes involve parental consent, school approval, and verification of age and job duties. Some states waive the requirement for children working in a parent-owned business; others do not. Check with your state’s labor department before your child’s first day.

Records You Should Keep

Federal regulations require employers to record the date of birth of any employee under 19 as part of payroll records.13eCFR. 29 CFR Part 516 – Records to Be Kept by Employers Payroll records must be kept at least three years, supporting time cards and earning sheets at least two. Even when the parental exemption removes the hour rules, keeping a paper trail of ages, hours, tasks, and any state permits is the single best defense if the Department of Labor ever comes asking.

What Violations Cost

Federal civil penalties reach up to $16,035 per child per violation. When a violation causes the death or serious injury of a worker under 18, the maximum climbs to $72,876 and can be doubled for repeated or willful conduct.2eCFR. 29 CFR Part 579 – Child Labor Violations—Civil Money Penalties “Serious injury” here means permanent loss or substantial impairment of a sense, body part, or organ. In setting the fine, the Department of Labor weighs the employer’s history, evidence of willfulness, the number and ages of the children, the nature of the work, any injuries, and whether work happened during school hours. States can add their own fines, corrective orders, or license actions on top.