With the coming of summer, many small to mid sized businesses are faced with what to do for summer hires. Here are some suggestions from The American Institute of Professional Bookkeeper's May 2008 newsletter.
Withhold FICA on all summer workers, even high school students, unless under 18 working for parent/sole owners. Have all summer employees submit a W-4—even students working part-time—and withhold FIT unless someone claims exempt or has more than 10 exemptions.
Health care, other benefits and pensions. Giving benefits to temporary and part-time employees is optional, but if you do not give them, this policy should be written in a plan document.
Vacation and holidays. Federal and state laws do not require paying summer or part-time help for vacation or holiday pay any time of year. But if you give vacation pay, some state laws may apply.
Overtime pay: federal law. Pay overtime for all hours physically worked over 40 hours in a workweek. You are not required to include paid time off—e.g., vacation days. Do not substitute paid non-work hours for work hours to make all hours straight time to avoid paying some hours at straight time and some at overtime.
Family-owned firms employing the owners’ children. If the parent(s) own 100% of the business as sole proprietor(s), partner(s) or stockholder(s), their children can work for them regardless of age, hours or time of day. But if the owners regularly employ other than immediate family, they must pay their children the federal minimum wage. Their children under 16 generally may do clerical but not “hazardous” work, such as operating lawn mowers, sewing machines, etc., or working where food is cooked or near flammable or hazardous material.
If you have questions about your situation. Please consult your accountant, attorney, local, state or federal agencies that specialize in labor / employment.
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