Do you need a permit to employ children in the family business?

Bringing children into the workplace has some obvious attractions: keep them out of trouble in their school holidays (or other ‘spare time’), give them an opportunity to earn money and gain workplace experience and help your business catch up on some of the tasks regular employees and bosses struggle to find time for. Plus you don’t have to pay them as much as your standard employees. All this can make providing casual employment to yours or others children or siblings seem like a generous and favourable course of action.

However, some employers may be unaware that there is legislation that governs the employment of children, which should be considered before they are brought into the workplace. This is relevant even when the children to be employed are relatives of you or your employees.

We recently looked into this for a client in Victoria who was asking about paying a young sibling to do casual work in the family business.

In Victoria, employment of children is legislated under the Child Employment Act 2003 and an entity must obtain a Child Employment Permit prior to employing children under the age of 15.

There is an exemption available for family businesses, but eligibility for the exemption is very dependent on the exact family relationship between the child concerned and the supervisors and owners in the business.

Permits are valid for 12 or 24 months, depending on factors in the application.

How do we know if our business meets the family business exemption criteria?
If a parent or guardian is the direct supervisor, and the business is wholly owned by the parent/guardian, the ‘family business exemption’ applies. This means you don’t have to hold a Child Employment Permit or observe general conditions of child employment relating to age, hours of work or rest breaks.

However where the direct supervisor is not a parent or guardian, or the business ownership includes persons beyond the parent or guardian, then the following applies:

    1. A Child Employment Permit must be obtained (before the child commences work for the business)
    2. There are restrictions on the type of work the child can do, the hours they can work and what rest breaks they must take
    3. The direct supervisor would need to hold a current Working with Children Check
    4. The business would be required to comply with Child Safe Standards.

That is the scenario that applies where you have a family business and a couple of the older children have bought into the business, or perhaps the owners siblings. As you can see, the definition of a ‘family’ business here is quite narrow.

What is involved in applying for a Child Employment Permit?
There is an application form to complete and a parent/guardian must also complete a consent form. Both of these are available online at https://www.business.vic.gov.au/hiring-and-managing-staff/employing-children/application-forms-industries-other-than-entertainment . They need to be lodged at least three business days ahead of when the child is to commence employment (or longer if you are submitting hardcopies). Any person to be involved in supervising the child will also need to hold a current Working With Children Check.

What happens if we employ children without a permit?
This is a criminal offence and penalties apply.

It would be in the best interests of the business and its owners or directors to obtain a permit, especially in event of worst case scenario of some sort of workplace accident.

Or, if you stick to only employing persons of 15 years of age or older, then you don’t have any of these complications.

Who can I contact for more information?

Don’t think you can just bring in your kids to work and pay them. Even in a family business there are some things you need to think about.

Thanks for reading.

By Genna Kidd

The information contained on this website has been provided as general advice only.  The contents have been prepared without taking account of your personal objectives, financial situation or needs.  You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.

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