Many businesses hire seasonal workers for extra help during their busy period. Whether you need to grow your team at the holidays, over the summer months, or another crucial time for your company, these seasonal employees are an important part of your staffing strategy.
But as any employer who has hired seasonal workers knows, there are many factors to review to make sure you’re being compliant. There are always pitfalls to avoid when it comes to hiring employees, and seasonal help is no exception!
Here, we cover some key best practices for hiring seasonal workers. As always, be sure to check applicable state and local laws for any additional requirements that may apply to your team.
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Seasonal Hiring Best Practices
1. Set Expectations
When it comes to seasonal employment, it’s always important to set the expectation with the employee that the work is temporary. It may seem obvious, but outlining the terms of the job, including specifying the limited duration of employment — verbally and in writing — keeps everyone on the same page. It’s a best practice to have temporary employees acknowledge in writing that they understand they’re being hired for a limited duration and as “at-will” employees.
2. Train Your Managers
Hiring employees for seasonal work also means training your managers to support the expanding team. From a compliance perspective, you’ll want to make sure these managers are up to speed on key issues, like your company’s anti-discrimination and harassment policies (in accordance with state and local laws). Supervisors should know the proper channels for reporting any claims that may arise.
Make sure managers are up to speed on key issues, like your company’s anti-discrimination and harassment policies.
Note that some of these trainings may apply beyond your managers. Seasonal employees should complete anti-discrimination and harassment prevention trainings as well, and they may be required to do so under applicable state or local laws.
From a scheduling perspective, managers should also be trained on any vacation or PTO expectations for seasonal employees. For instance, if you’ve hired an employee specifically to work holiday hours and they request Christmas day off, their supervisor should know how to handle the request.
3. Classify Correctly
When hiring workers, it’s always important to classify them correctly. Companies often misclassify employees as independent contractors. Avoid designating a seasonal workers as an independent contractor without first determining that the circumstances legally justify such a classification.
If a seasonal employee works on average at least 30 hours per week for a period exceeding 120 days, you may be required to offer health insurance under the Affordable Care Act. You should review your benefits policies and health plan documents to determine whether seasonal workers are eligible, as these documents may require you to provide benefits more generous than what the law requires.
Misclassifying employees can carry penalties for your business, so it’s crucial to get it right.
How to Correctly Classify Your Workers
The guide for classifying different types of workers.
If you’re a Justworks customer, you can visit our Help Center article on member types for help designating your employees in our platform.
4. Withhold the Correct Taxes
Part-time and seasonal employees are subject to the same tax withholding rules that apply to other employees. They’ll need to complete a Form W-4 and any applicable required state withholding forms.
In some cases, employees may earn too little from their seasonal work to owe income tax. Check the IRS rules or consult with a tax professional to make sure you withhold correctly.
5. Pay Overtime When Necessary
When you’re hiring employees for the busy season, it’s not uncommon for those people to work overtime. Make sure you are accurately tracking hours so that you can pay people any overtime pay they are owed.
The Fair Labor Standards Act (FLSA) generally requires employers to pay employees at least the minimum wage for all hours worked, and overtime pay at a rate of 1.5 times the employee’s regular rate of pay for hours worked over 40 in a workweek. The FLSA does, however, exempt certain kinds of employees from the minimum wage and overtime requirements. Some states and local jurisdictions have their own wage and hour laws, which may provide greater protection for employees than what is provided under the FLSA.
Federal law doesn’t require private employers to pay employees overtime for working on a holiday. However, many businesses will opt to offer non-exempt employees extra pay as an incentive for people to work on those days. While it’s up to you, make sure your policy is clear and adhere to it in all cases.
6. Follow the Usual Rules & Policies
This should go without saying, but seasonal workers are still employees, too. In other words, most employment laws that apply to all your other employees will also apply to those seasonal folks.
Most employment laws that apply to all your other employees will also apply to seasonal workers.
However, one that may not is The Family Medical Leave Act, or FMLA, which allows employees to take up to 12 weeks of job-protected, unpaid leave during a 12-month period for qualifying family and medical reasons, among other things. Seasonal workers likely won’t qualify for FMLA because they won’t meet the eligibility requirements. Bear in mind, however, that some states have their own versions of this law that have different requirements — and may apply to your seasonal workers.
Similarly, consider what other policies you have in place and whether these will apply to seasonal employees. For instance, they may not be eligible for benefits under the law, but what does your company policy outline?
This is another instance when time tracking becomes important. For example, many state and local paid sick time laws include coverage for seasonal employees. However, depending on how many hours the employee works and/or their length of service, they may not meet a law’s covered employee threshold. Most, if not all, paid sick leave laws require that previously accrued but unused paid sick time be reinstated if employees are rehired within a specific timeframe. The reinstatement timeframe varies by jurisdiction.
It’s best to consult with counsel to determine whether employees who did not satisfy a waiting period during the initial period of employment must satisfy what would be the remainder of the waiting period before taking paid sick time during the subsequent period of employment. If you’re a Justworks customer, you can learn more about rehiring on our platform in our Help Center.
It’s also important to be aware of final pay laws. In some states, you may be required to give the employee their final paycheck on their last day on the job. If a seasonal employee has no upcoming shifts scheduled, for example, it may be a good idea to treat their last shift as their last day so you’re prepared with that paycheck (even if you do end up giving them another shift).
7. Allow For Flexibility
Many workers prioritize flexibility, including seasonal workers. Allowing for this when you can — within the limits of your business needs — may be a good way to attract and retain seasonal hires.
According to SHRM, this can take several forms. Maybe it’s cross-training employees so they can pick up more shifts, or different kinds of shifts. Maybe it’s telling seasonal workers their schedules a week in advance. Consider what kinds of strategies might be a good fit for your team, and how you might implement them.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.