Jaundice is an external sign of excess bilirubin in the blood. This can be from liver disease or break down on red blood cells.
Neonatal jaundice is normal and healthy to a point, all babies are born with lots of red cells/haemoglobin to help them steal oxygen across the placenta from mom, and as they take the first breaths of their own air the red cells start to be destroyed by the body as they are not needed in such quantities; releasing iron to be stored and bilirubin. Low levels of jaundice are safe and protective, and breastfeeding often maintains a low level of jaundice for up to 8 weeks.
If red cells break down TOO much, TOO soon excess levels of jaundice occur and the baby gets sleepy and if very high, can lead to brain damage. A simple heel prick blood test will give a blood level and decide what course of treatment is needed, if at all.
In older kids, jaundice always needs investigating to look for hepatitis or other liver disorders.