Hiring your kids in your business is one of the smartest tax and life lessons around. But even with the special family-business exceptions in labor law, there are still rules and boundaries.
Let’s break down the key exceptions so you know when the answer is “yes, go for it!” and when it’s “nope, too risky.”
1. The Family Business Exception — in a Nutshell
Under federal law (FLSA), parents can employ their own children of any age in their business, and most child labor restrictions don’t apply.
But there are two big carve-outs:
- Hazardous Jobs are always off-limits.
- Some states don’t fully follow the federal exemption.
2. Hazardous Work = đźš« No Kids Allowed
The Department of Labor has a list of jobs that are too dangerous for minors, even when working for their parents.
Here are some of the most common hazards where young children and teens cannot work:
- Operating or cleaning power-driven machinery (like saws, bakery mixers, meat slicers).
- Working with explosives or fireworks.
- Roofing, excavation, or demolition work.
- Driving a motor vehicle as part of the job (and for most under-18s, even delivery driving).
- Jobs in mining, logging, or sawmills.
- Exposure to certain toxic substances (like lead or dangerous chemicals).
👉 In short: office tasks, light shop work, social media, filing, cleaning, and research = fine. Heavy equipment, ladders, demolition, and chemicals = off-limits. The PaprikaTax app can help you to quickly navigate this issue and make sure you’re in compliance…www.PaprikaTax.com
3. State-Level Curveballs
Most states follow the federal family-business exception. But a handful of states do not fully recognize it — meaning even parents face stricter rules.
Here are states where hiring your child is more restrictive:
- California – Stronger limits; still requires permits for minors, even in family businesses.
- New York – Narrower family-business exceptions, especially around hours and permitted industries.
- Illinois – Extra rules for work permits and occupations.
- Massachusetts – Many jobs off-limits regardless of parental ownership.
- Nevada – Age and permit requirements apply, even for family-owned businesses.
- Others with stricter local variations: Colorado, New Jersey, and Washington State.
đź’ˇ PaprikaTax Tip: Always check both federal and state rules. Our app points you to state-specific quirks so you don’t miss a detail…www.PaprikaTax.com
4. The Safe Zone (What Parents Should Focus On)
To keep things clean, here are the “green light” areas for kids in most states:
- Office support (filing, shredding, scanning).
- Marketing help (social media, photo shoots, flyers).
- Customer service (greeting clients, answering phones).
- Light cleaning and organizing.
- Digital tasks (research, spreadsheets, website updates).
See this blog post for a long list of ideas: 🌶️The PaprikaTax Guide: What Work Can the Kids Do? (A Long List)
5. Why Documentation Matters
Even if your child is doing safe, legal work:
- Document the role and duties.
- Pay fair market wages.
- Keep it all on the books.
That way, you’re bulletproof if anyone asks questions.
🌶️ Bottom line: The family-business exception is powerful, but not unlimited. Keep kids away from hazardous jobs, pay them fairly for safe tasks, and double-check your state rules.
With PaprikaTax, you can confidently hire your children, track the right jobs, and maximize your tax savings — all while staying 100% compliant. It doesn’t pay to DIY this strategy. We can help you quickly maximize the PAPRIKA strategy in a safe way!
– Written by David Nagy, CPA, PaprikaTax.com
PAPRIKA stands for “Parents Allocate Payroll Rationally Increasing Kids’ Assets”
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