Plan Before You Hire Seasonal Employees – Brigade Bookkeeping

Are you considering hiring seasonal employees? These workers are the lifeblood of companies that experience a periodic uptick in business and find it more financially feasible to hire temporary workers.

But before they start working for you, your business will need to comply with federal and state regulations for seasonal employment. Most seasonal workers have the same rights as other contingent employees but not necessarily the same benefits. And yes, it gets confusing!

Let’s review some of the considerations you’ll want to address to avoid worst-case-scenarios like litigation, expensive fines, and back-pay.

Classify Them Correctly

It is important to classify seasonal employees correctly under state and federal laws. Workers cannot be treated as independent contractors for tax purposes, with no payroll taxes withheld, if they are used and treated like full-time employees but simply for a short period.

Withhold Correctly

Generally, an employer must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment taxes on employee wages.

Pay Them Within the Required Regulations

There are no special pay rules for seasonal jobs, however, employers must follow the minimum wage laws with your seasonal workers just as you do for your permanent employees.

They are Protected by Several Labor Laws

Seasonal employees are covered by discrimination, workplace safety, and harassment laws. When you are employing teenagers, there are minimum age and hazardous job regulations that must be adhered to in your hiring.

Make Sure They Stay Seasonal

When their employment lasts longer than 120 days, seasonal workers will potentially cross over into “part-time” status which entitles them to different benefits. It’s a good idea to have an employment letter/contract for seasonal workers that specifies the duration of the project along with how they will be paid, as well as a clause that says you can end the contract early if the temporary relationship isn’t working.

Issues With Complicated Answers

And still, there are more considerations when hiring seasonal workers! Questions with “it depends” answers include:

• What additional benefits are they entitled to?
• Does the addition of seasonal employees make your company an applicable large employer (ALE)? If so, your company is subject to the Employer Shared Responsibility Provisions, which means you must provide health insurance to employees or pay a penalty.
• How many hours per day or week can a seasonal employee work and does overtime pay come into the equation?
• Is extra pay required for weekend or night work?

The bottom line: Seasonal workers can add significant value to your organization. Planning is required for this workforce so you can protect your organization and minimize the risks. If you’re considering hiring seasonal workers, or have them on staff but are unsure if you’ve got your employment, wage, and labor regulation bases covered, let’s have a conversation!