Hiring an individual under the age of 18 doesn’t relieve an employer from complying with various laws that entitle applicants and employees to certain rights, benefits and protections. In fact, some laws impose stricter rules on the employment of minors to protect their well-being. To help you understand the rules, here are seven youth labor compliance mistakes to avoid.
KEY POINTS
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Mistake #1: Assuming compliance with federal law is enough
Federal law (the Fair Labor Standards Act) sets nationwide standards for:
- Minimum ages for work;
- Maximum hours of work for minors; and
- Permitted occupations for minors.
However, many states have established stricter standards. When both federal and state law apply, employers must typically follow whichever standard is more protective of the minor. If you’re not sure, consult counsel with any questions about which laws apply to your business.
Mistake #2: Failing to complete new hire paperwork for youth workers
Whenever hiring a new employee, employers must complete certain paperwork, including the following items.
Form I-9
Employers must complete and retain a Form I-9 for all new hires, including minors. Like other new hires, minors must provide documentation that verifies their identity and their authorization to work in the United States from a list of acceptable documents. In some cases, a minor may not have a document that verifies their identity, such as a driver's license issued by a state. There are special procedures for such cases. Note: If you use E‑Verify, different documentation rules may apply for minors.
Form W-4
All new hires must complete a Form W-4 to determine the amount of federal income tax to withhold from their wages. Many states also require a tax withholding form. Employers should ensure they are using the latest version of the form, which may change each year. If the employee has questions or asks for advice on how to complete a W-4, instruct them to speak with a tax advisor.
Notice of Coverage Options
Under the Affordable Care Act (ACA), employers must provide a Notice of Coverage Options to all new hires within 14 days of their start date. This requirement applies even if the employer doesn't offer health insurance and/or the employee is not eligible for health insurance.
Tip credit (if applicable)
Under federal law, employers that use the tip credit must first notify tipped employees:
- The minimum cash wage that will be paid.
- The tip credit amount, which cannot exceed the value of the tips actually received by the employee.
- All tips received by the tipped employee must be retained by the employee except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips.
State and local notices
Many states and local jurisdictions also require that employers provide specific notices to employees at the time of hire. These required notices may cover state disability insurance, state-run retirement programs, leave entitlements, harassment and discrimination, workers' compensation, unemployment, and other employment-related benefits and protections.
Many states require employers to provide, in writing, the employer's business name, address, and telephone number; the employee's rate of pay and regular payday; and certain other information. Provide new hire notices in accordance with your state and local requirements.
New hire reporting
Federal law requires that employers submit certain information to their state regarding each new hire within 20 days of the employee's start date, but several states have shorter timeframes. New hire reporting is included in many RUN Powered by ADP® packages. If you have to fulfill these responsibilities on your own, you have several options, such as submitting the new hire's W-4 or an equivalent form. Check your state's new hire reporting program for details.
Mistake #3: Violating minimum age requirements
Federal law prohibits anyone under the age of 18 from working in a “hazardous occupation.” Additionally, federal rules significantly limit what 14- and 15-year-olds may do and where they may work. Certain industries and duties are also prohibited or tightly restricted.
Under federal law, minors under the age of 17 are prohibited from operating a motor vehicle. Employees who are 17 or older may do so, as long as certain conditions are met.
Many states and local jurisdictions have additional restrictions, and you also may be required to obtain and keep documentation of the minor's age. Check your state and local law to ensure compliance.
Mistake #4: Underpaying youth workers
Under federal law, employers must generally pay all non-exempt employees, including minors, at least the minimum wage for all hours worked and overtime whenever they work more than 40 hours in a workweek (some states require overtime in additional circumstances).
Federal law allows employers to pay employees under the age of 20 an "opportunity wage" of $4.25 per hour during the first consecutive 90 calendar days of employment. After 90 days, they must receive at least the full minimum wage.
Keep in mind that state and local laws may differ. For example, many have higher minimum wage rates (including a higher youth minimum wage) and/or specifically prohibit employers from paying anything less than the minimum wage. Check your applicable laws to ensure compliance, and always pay at least the higher required wage.
Mistake #5: Neglecting to obtain a work permit when required
Many states require minors to have a work permit or working papers before they can start work. Work permits are typically obtained through the minor's school district or the state Department of Labor. Some states have additional requirements. For instance, Washington requires employers to obtain and display an endorsement if they will be employing minors.
Mistake #6: Asking minors to work too many hours
Federal law and many state laws restrict the hours a minor can work.
Under federal law, when school is in session, 14- and 15-year-olds can work three hours on a school day or 18 hours in a school week.
When school is not in session, they may work up to 40 hours in a week.
While there are no federal limits on the hours worked by 16- and 17-year-old workers, some states impose such restrictions.
Mistake #7: Failing to provide rest breaks just because your adult employees aren’t entitled to them
Many states have specific meal and rest break requirements. Even if your state doesn’t require you to provide breaks to adult employees, you may be required to provide them to minors. Check your state law for details, as these rules vary widely.
Conclusion
These are just some of the compliance mistakes to avoid when hiring a minor. If you're planning to hire minors, make sure you comply with all applicable federal, state and local laws.
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