Obtain W-4s from all summer employees, even the owners’ children, students working part-time and foreign students.
Withhold FITW from all employees, including the owner’s spouse/children, unless a W-4 claims exempt.
Withhold FICA from all employees, even high-school students and those who receive SS benefits. Exception: Employees under 18 working for sole-owner parents.
Pay overtime for hours actually worked over 40 hours in the workweek. You are not required to include as hours worked paid time off (holidays, vacation days). Do not substitute paid nonwork hours for work hours to make all hours straight time, thus avoiding overtime pay.
Example: Eric works 12 hours a day, 4 days of the workweek. He is off the 5th day, a holiday, but is paid for 8 hours. He is correctly paid 40 hours’ straight time + 8 hours’ overtime + 8 holiday (nonwork) hours. Eric’s employer is not allowed to substitute the 8 hours’ holiday pay for Eric’s 8 hours of overtime to avoid paying the overtime rate.
Paid holidays and vacations
Under federal law, paid holidays for part-time and summer help are always optional, but check state laws.
No paid vacation is required—but if you provide paid vacation, some federal and state laws apply.
For temps and part-timers, benefits are optional; if offered, they should be explained in a written benefits plan.
–The American Institute of Professional Bookkeepers (AIPB)