Summer time is here! The kids are out of school. They have free time to play video games, surf the Internet, chat on Facebook, and harass the neighbors with fire crackers. In fact, they have too much time. Time that could be better spent doing something useful, like working. Hmm…you own a rental store. You could hire your kids for the summer… But wait. Maybe you should think this through. Employing your children, can have lots of implications, some good and some bad. Here are some things you should consider before having Johnny fill out the W-4 form.
When I was eleven, I started working at my parents’ rental store. I was put in the wash rack, washing lawn mowers and sewer snakes. Sounds safe enough, but one day after the shop was closed, I continued working while waiting on my dad to finish up in the office. Trying to find helpful things to do, I decided to add gasoline to one of the mowers. However, the building was locked, so I couldn’t move it outside where this was normally done. When gasoline overflowed the tank and seeped onto the floor, I got the bright idea to burn it off with a match. Thankfully, no one was harmed and the building stayed standing, but the deafening boom made my dad come sprinting. (Needless to say, I got to go home after that.) So before you hire your child, not only should you make sure the job duties are age appropriate and carefully outlined, you should also check with your insurance agent to make sure you have appropriate coverage.
Be sure to discuss your goals and desires with your current employees. Do you expect them to correct your child? Who is your child’s boss? Having someone other than yourself as their direct report is great training for your child; however, if you don’t allow that employee to correct or discipline your child, it could be a recipe for disaster. I can remember getting into a physical altercation with a fellow employee when I was 14 and he was twice my age. I’m sure I was mouthy, but I doubt my dad was prepared to have that conversation with an employee. Plan ahead for uncomfortable situations so you will be ready if they occur.
One of the great features of a family-owned business is the nice homey feel created when multiple generations work lovingly side by side…you know like The Walton’s or is it Sanford & Son? (For the younger people, The Cosby Show or The Kardashians.) I always tried to gravitate to the front counter near the air conditioning and computers, but my dad would wisely send me back outside. Customers might find a twelve year old cute for about 30 seconds, but when they want answers about how many feet a trencher will dig or how many guests can fit under a 20’x40’ tent, they don’t want to talk to a kid. It is a good way to convince your customer to use a more “professional” nationwide company.
I don’t know how my dad didn’t fire me a thousand times. I don’t believe I have the patience he did. Before you put your sweet dumpling on the payroll, you need to ascertain your patience level to see if you are up for the challenge. You might decide you are not up for it when they are eleven, but you can handle it when they are sixteen (or maybe it is the opposite).
Most child labor laws and minimum wage laws don’t apply to children of the owner; however, the law varies depending on whether the company is a corporation, LLC, or sole proprietorship. Also most child labor laws are Federal, but some states have additional requirements. If you are looking to hire children of non-owners, you will have to adhere to all the standard labor laws which means they must be at least 14 years old, have only certain times of the day they can work, and only certain types of jobs. If they are at least 18 years old, the child labor laws no longer apply. In either case, a quick call to your accountant or a lawyer will ease your mind.
So if you are still reading, I guess I haven’t scared you off yet. Let me tell you some positives.
When my dad hired me, he said, “I would love to pay you what you are worth, but they have minimum wage laws.” Actually, if your child works in your company, you can pay them less than minimum wage. But a better plan is to pay them minimum wage (or higher) and have a certain amount deposited into a college savings account. I was paid $2 per hour. I got to keep $1 of that and the other $1 per hour went into my college fund. It was great to have savings already set aside when college rolled around. Of course those wages are fully tax deductible for the business so you could get a tax deduction to save for college.
I think we all want our kids to get a job, but when it comes down to it, we are concerned about the environment that they may be subjected to. You have absolutely no control over the working environment at McDonalds, but you have lots of control at your own business. You can monitor, guide, and direct the experiences and interactions your child has in the work environment. Growing up working at the rental store allowed me to learn a lot more from my parents than most kids can. In addition, I was influenced by their trusted employees.
While I stated earlier that it takes a special parent to have their kids work for them, it adds a lot to the family interaction. Many parents today can’t seem to communicate with their kids because they don’t have much in common. Working together gives a common language. Still today when we are all sitting around the dinner table, the majority of the conversations center around rental related issues.
To quote Ken Andrews, “Isn’t the rental business great!” It is great. With so many different facets, it can appeal to everyone. While I don’t work behind the counter anymore, I still spend everyday working to make the rental experience better for the owner, the counter guy, the delivery driver, and even the eleven year old son doing inventory. No matter what your child may like to do, there is likely a career for them in the rental industry, and working at your store can bring experience that will benefit them later.
Working in the rental business prepares kids for the future. That future might be running the rental store after dad retires, which is what my brother did, or it may be running a software company. No matter what is in store for your children, the lessons learned while working alongside you will set the foundation on which they will build their future.
Overall, the long term benefits of hiring your kids outweigh the problems that can arise. I think I am a better person since I grew up in the rental industry, and I think your kids will be as well.
Enjoy your summer,
President & CEO