Do I have to pay my sister minimum wage to work at my business under Arkansas Law. She helps oversee the business - to keep an eye on the kitchen to make sure there is no waste. She just wants to get out of the house to keep busy. We are both happy with the situation but what is the law. I do have 10 other employees that work for minumum wage. She gets free food also. She is in the store for about 15 hours a week. Also can I pay her cash because she is a family member?

She's still an employee; being your sister is not enough of a family relationship to allow her to work for free. She would have to be your spouse or child or a partial owner.

Accordingly, you must pay her at least minimum wage for all hours she works, overtime when she works over 40 hours per week, and deduct taxes and report her wages in accordance with the laws of the IRS and your state. It is not illegal to pay an employee in cash; it is illegal to pay her under the table and not deduct taxes or report her wages. Based on what you've told us she does, she does not qualify as an independent contractor.