Justice attorneys said they concluded the section does not bar the appointment because the president's special hiring authority in that section exempts positions in the White House office.
The memo was written by Deputy Assistant Attorney General Daniel Koffsky.
Koffsky argued that the president is given broad powers to hire and manage his staff in the White House and that anti-nepotism laws mainly apply to individuals holding an official position within an agency of the executive branch.
Trump said in recent interviews that Kushner would work to broker peace between Israel and the Palestinians, and expressed confidence that he would be successful.
Boston native who threatened Trump assassination being held in Miami
He was arrested on Tuesday, the day after posting the video. "My other name is the Lord, Jesus Christ", Puopolo said in the video. Puopolo, who said he was disabled and homeless, was charged with threatening to harm a public servant.
The DOJ's statement echoes the position held by Kushner's lawyer earlier this week, who argued that that Kushner's appointment to his father-in-law's administration "is clearly lawful" under president's authority.
U.S. President Donald Trump, flanked by Senior Advisor Jared Kushner (standing, L-R), Vice President Mike Pence and Staff Secretary Rob Porter welcomes reporters into the Oval Office for him to sign his first executive orders at the White House in Washington, U.S. January 20, 2017.
Richard Briffault, a government ethics expert at Columbia Law School, disagreed, saying: "Given the fact that the president is specifically mentioned, you would think that someone that is working for the president would be covered" by the anti-nepotism law. "Any appointment to that staff, however, carries with it a set of legal restrictions, by which Congress has regulated and fenced in the conduct of federal officials". The office of White House counsel had asked the department for a definitive opinion on Kushner's role.
"Consequently, even if the anti-nepotism statute prevented the president from employing relatives in the White House as advisers, he would remain free to consult those relatives as private citizens", it said. In 1977, the office advised that President Carter would not be able to appoint first lady Rosalynn Carter to serve as chair of the President's Commission on Mental Health as it was independent from the White House. President John Kennedy picked his brother Robert as attorney general, while President Bill Clinton put his wife, Hillary, largely in charge of a failed campaign to overhaul the nation's health care system.