Looking to hire extra staff for the up and coming holiday season, or find that you wished you’d hired temporary workers this past summer? Hiring seasonal workers involves following a few rules of the road. Many of the laws and regulations that apply to full-time employees also apply to seasonal or part-time employees.
Here’s what you need to know as you plan your seasonal workforce:
Labor Laws Still Apply
Laws that cover harassment, discrimination, and workplace health and safety apply to seasonal workers just as they do to any other employee. If you’re not familiar with these, check the SBA’s Employment and Labor Law Guide.
Likewise, under the Fair Labor Standards Act (FLSA), part-time and full-time employees have equal rights concerning minimum wage, overtime pay, recordkeeping and child labor.
Hiring Independent Contractors – Laws are Different
Independent contractors are essentially self-employed individuals who often welcome seasonal or part-time positions. These individuals are usually experienced in certain fields and often work unsupervised or as part of your team.
It’s important to note that independent contractors are hired by you and not employed by you. As such, you aren’t required to provide benefits, withhold tax/Medicare/Social Security, or pay unemployment taxes. You also can’t dictate the hours the contractor works. However, you are required to report compensation of $600 or more to the IRS.
If you are hiring employees – not independent contractors – regardless of whether they are seasonal or not, you still must provide certain benefits by law. These vary by state and include:
1. Unemployment Benefits – Check with your state department of labor to determine the specific laws that apply in your state. While employers generally are not exempt from unemployment benefit obligations if an employee is hired for a brief or temporary amount of time, there may be exceptions for “seasonal employers” who, because of the nature of their business, require temporary employees for periods lasting 10 weeks or less.
2. Social Security/Medicare – You must withhold part of Social Security and Medicare taxes from your employees’ wages and pay a matching amount yourself.
3. Workers’ Compensation – Businesses with employees are required to carry Workers’ Compensation Insurance coverage through a commercial carrier, on a self-insured basis, or through a state Workers’ Compensation Insurance program. Your state’s agency can help you find out more about requirements for employers.
Certain benefits, also called “fringe” or “soft” benefits, aren’t required by law and are offered at the employer’s discretion. These include paid leave, retirement plans, and medical insurance. Whether you decide to offer these or not is up to you, but it’s best to be explicit in advance about what you will and won’t provide during the recruitment process.
What About Taxes?
Part-time and seasonal employees are subject to the same tax withholding rules that apply to other employees. For details on your tax reporting responsibilities, refer to IRS regulations on part-time or seasonal help. Be sure to check state tax laws that pertain to these employees too.