Under US and state labor laws, little Billy is running a criminal operation; He opened a lemonade stand and did not pay his friends minimum wage because they only made $5 in sales. He did not provide workers comp insurance or withhold income tax/social security/medicare taxes from his friends pay. He did not deposit payroll taxes and did not file a sales tax return. He is violating child labor laws. Depending on the state, he is probably operating illegally without a health inspection/permit.
