With the holiday season upon us, many businesses will be looking to hire workers to meet customer demand. It’s important that businesses understand the risks involved and avoid any issues which may dampen their holiday spirit.
Below are some things businesses should be aware of when hiring seasonal workers.
1. Who is considered a “Seasonal Employee”
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. Wage and Hour Law Compliance
The federal Fair Labor Standards Act (FLSA) and state laws generally require businesses 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 laws. 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.
Businesses should be mindful not to misclassify a seasonal worker as an independent contractor. Companies should ensure that anyone they classify as an independent contractor passes an independent contractor test.
4. Employment Authorization Verification
Seasonal staff are considered employees and businesses need to verify 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.
5. Employment of Minors
Both federal and state laws restrict the time of day and number of hours that minors can work, the type of work that minors can perform, and the equipment they can use. Businesses should be aware of federal, state and local law restrictions.
Businesses should also recognize that most federal and state employment laws apply only to companies with a certain number of employees. So, their seasonal employee headcount might bring their business under the purview of additional laws. Small businesses in particular should pay attention to whether hiring seasonal employees will increase their total number of employees and trigger additional legal obligations.
Employers should take care to hire the best seasonal candidates, apply and follow internal policies, and closely monitor their pay practices to ensure they are complying with state and federal laws. Employers that carefully assess their seasonal hiring practices can take great strides toward protecting themselves from liability.
Marzano Human Resources Consulting has provided guidance to many businesses regarding hiring and pay practices, along with ensuring compliance with all other federal, state and local employment regulations. Businesses should consider contacting us to ensure they mitigate risk to their company.