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11/21/2023

10-Step Compliance Plan to Hiring Seasonal Workers

Source: Fisher Phillips, November 27, 2023

Employers across a wide variety of industries are looking to ramp up their hiring efforts as the holiday season begins. Indeed, many businesses will rely on temporary workers to meet the uptick in demand that holiday shopping brings – which makes it critical for you to understand and avoid the legal pitfalls associated with seasonal employment. Here are 10 practical tips to help you stay compliant as you prepare for the holiday rush.

1. Understand the Definition of “Seasonal Employee”

First, you should determine whether your temporary employees are truly “seasonal.” According to the IRS, an employee is considered seasonal if the employment period is expected to last for six or fewer months and the need for the role usually starts and ends at about the same time each year – such as November to January for the holidays.

2. Ensure Compliance with Wage and Hour Laws

The federal Fair Labor Standards Act (FLSA) and state laws generally require you to pay seasonal employees 1.5 times their regular rate of pay for all hours worked beyond 40 in a given workweek. However, certain individuals are exempt from overtime requirements under both federal and state law. Under the FLSA, for example, employees of certain seasonal amusement or recreational establishments, organized camps, and religious or nonprofit educational institutions are generally exempt from overtime pay. Additionally, the FLSA provides for subminimum wage for minors under certain circumstances. It’s important that you review your seasonal employees’ status under federal and state law to determine whether overtime exemptions apply. You should also be aware of various state and local laws that apply to meal and rest breaks, predictable scheduling, and other requirements.

3. Verify Employment Authorization

Employers must treat seasonal staff in the same way they treat regular employees by verifying that they are legally eligible to work in the United States. Employers should complete the Employment Eligibility Verification form (I-9 Form) even for seasonal employees. If you're hiring remote workers this season, you should review new options for remote I-9 completion and be sure to use the recently updated Form I-9.

4. Avoid Issues with Misclassification 

Businesses often misclassify employees as independent contractors and, in the process, open themselves up to significant potential liability. This temptation can be especially compelling with seasonal employees. You should avoid designating a seasonal worker as an independent contractor without first determining that the circumstances legally justify such a classification. You should also note that some states, such as California, Illinois, Massachusetts, and New Jersey, have stricter rules than federal law when it comes to independent contractor classification.

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