Chicken Body Lice

Since chickens are outdoor animals, they are susceptible to lice and mites. A common species is called Chicken Body Lice. They are small, but easily visible, and light yellow/tan. The lice will lay (or glue) their eggs at the base of the chicken's feathers usually around their bottom. 
 "It feeds on skin fragments, feathers and debris. Its gnawing activities cause the host's skin to be irritated, red, and scabby. As a result, infested birds lose weight and layers decrease egg production. Extremely heavy infestations can kill poultry," (http://ipm.ncsu.edu/AG369/notes/chicken_body_louse.html). 


One way prevent this, is to spread Diatomaceous Earth all around the floors of the coop and run, the nesting boxes and dust bathing area before you get chickens. And continue while you have the chickens.
DE is made of tiny fossilized water plants. It is crushed into a powder so it's soft to hands and chickens, but to insects a lethal dust with microscopic razor sharp edges.
 To put it on the chicken, hold her under your arm (like a football), her head facing your back. Take small handfuls of DE and gently rub it into the feathers around the infested area.

If your chickens are infested with lice, then you can fill up a bucket or sink with warm water and some flee shampoo (kitten/puppy dose, or adult diluted), hold the chicken in the water (keep it's neck and head above water), gently rub in shampoo in infested areas. Then rinse a few times thoroughly, and blow dry or wait for the feathers to dry. And I used  a very diluted flea and tick pyrethin dip, which has worked so far, but ask someone (like an experienced chicken keeper, or someone at your local feed store) about using something like this first.
In my case, DE didn't help get rid of the my chickens lice, I think its a better prevention than treatment. But I still put it everywhere in the coop and run. Always wear a mask to cover your nose and mouth when applying DE on the chicken or spreading around the ground, it is hurtful to inhale. I get my DE at Island Seed and Feed, make sure it's food grade-they'll know. I use an old towel to put on top of me to collect all the extra DE and put it in their dust bathing area or back in the bag
Chicken Body Lice can only live on a feathered host, so you don't need to worry about getting it when handling a chicken.