Summer officially begins on June 20, bringing with it longer days, rising temperatures, and the hiring of thousands of seasonal and temporary employees. Although the additional help can be very beneficial for companies, it also produces additional liabilities for a company - specifically the payroll department.
Like retailers at Christmas, industries like agriculture depend largely on a seasonal or temporary workforce during the summer to successfully get them through their busiest time of year. Many employers use the opportunity of hiring seasonal and temporary employees as a way to get to know excellent workers who will eventually become permanent full timers.
Although the additional help can be very beneficial for companies, it also produces additional liabilities for a company - specifically the payroll department. Below are a few issues to consider when hiring seasonal and temporary employees.
Determining the Difference Between Seasonal, Temporary & Part Time Employees
The first issue to consider is the classification of employment you need to hire for - there are several key administrative differences between season, temporary & part Time employment.
In most cases, an employee is considered part time if they work less than 35 hours a week. However, according the FLSA (Fair Labor Standards Act), it is the employer’s responsibility to determine if the employee is full or part time. Most part time employees are paid on an hourly basis and do not receive benefits, such as paid time off and health care. However, even part time and seasonal employees must be treated the same in terms of minimum wages and overtime rules.
The Affordable Care Act is another consideration when classifying temporary and seasonal employees. Those who work less than 120 days in a year are not counted when determining if an employer is an ALE.
Seasonal and temporary (“temp”) employees are hired under stipulations of a set periods of time. Unlike temporary employees, seasonal hires are tied to annually occurring events such as summer or Christmas employment opportunities. Many seasonal or temporary employees are also part time.
Potential Employee Record Keeping Issues
Seasonal and temp employees can be a headache for payroll and HR departments, which means it is important to complete paperwork correctly the first time. A smooth on-boarding process during a busy hiring season will help a company secure and retain the best seasonal and part time workers.
The employer needs to ensure their employee's employment status is classified correctly and they are placed appropriately on the payroll. For example, if you do not withhold the correct amount of taxes you will be responsible to refund 100% of the owed taxes, plus additional fees and interest on the owed amount. The employer is also responsible for including the temporary/seasonal employee’s wage in payroll taxes and filings.
Note that classifications and regulations will vary for each state. You can read more details about state employment information on the DOL website. Filing correctly will save you the burden of extra paperwork and penalties in the future.
Employee Policies & Procedures Don’t Change
Seasonal and temp hires are to be treated equally under the FLSA in regards to minimum wage, overtime, child labor and record keeping - they are not exempt from labor laws such as discrimination and work place safety.
Seasonal and temporary employees should also be held responsible for presenting Form W-4, complying with company policies & procedures, and preforming their job to the set expectation.
One last item of advice is to introduce and train all part time, seasonal and temporary employees as if they were full time employees. This will maximize the value of the employee, help them complete their job and immerse them in the company culture.
Ensuring that employee classifications, payroll and training are done correctly will help your company get the most out of part time, seasonal and temporary hires, without being a burden on Payroll and HR. For more advice on hiring fantastic employees, read how to create a fantastic job description.