Legal Question in Business Law in California

Owners of a closely held corporation do not have to become employees. There is no rule that a corporation has to have any employees. In fact, although I am not a corporate tax expert, I think under some circumstances you have to pay yourself in dividends rather than as employees. If you elect S-Corp tax treatment, you pay yourselves the profits the same as a partnership and are taxed as if you are a partnership. So there are a lot of variations, none of which require you to pay yourselves minimum wage. The only requirement is that if you DO elect to become employees of the corporation, then you do have to pay at least minimum wage.

Of course, a minimum wage is expressed in dollars per hour. If you wish, you can work as an employee three hours a week and as an (unpaid) owner the other 37, or 77, or whatever. In addition, owners can elect not to be covered under Workers' Comp., and if I recall, there is a relatively simple notification process - ask your Workers' Comp. agent or contact them directly for specifics.