Hiring Seasonal Employees: A Guide to Minimize Legal Risks

Summary

• Hiring seasonal employees offers flexibility during busy times of the year, but it isn’t without legal risks.
• Employers must comply with specific employment laws and ensure seasonal workers receive the wages and benefits they’re entitled to.
• Workforce.com helps simplify seasonal hiring and keeps compliance tight and hassle-free.

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Hiring seasonal employees is a common staffing strategy during busy seasons with increased demand, such as holiday peak times, vacation surges, or festival weekends. Working with seasonal employees can help businesses scale up (and down) easily. 

But seasonal hiring isn’t without legal risks. The flexibility of using seasonal workers also creates a minefield of compliance issues. If you misclassify a worker or fail to meet requirements under wage and hour laws, you can face legal trouble. 

Seasonal employees are only with you for a few weeks or months, but there are labor laws that apply to them. Let’s look at what these are, what they mean for employers, and what best practices are to stay on the right side of the law when hiring seasonal workers.

What is a seasonal employee?

Seasonal employees work only part of the year, typically during periods of high demand. They could also be employees hired by seasonal businesses that only operate part of the year.

Some examples of industries that hire seasonal staff include: 

• Retail stores – during demand surges such as the holiday shopping season
• Agriculture businesses – during planting and harvesting season when they need extra help. 
• Hospitality establishments—beach resorts, ski lodges, theme parks, and summer camps—are used during high-peak tourist months such as summer and winter.

Temporary employees vs. seasonal employees

Temporary and seasonal staff can easily be mistaken for one another, but there are distinct differences in how and why businesses hire them.

Temporary workers fill staffing needs by assuming the role of an employee on maternity leave or recovering from a disability. In some cases, employers hire them for short-term projects. Their employment length varies from a few weeks to several months, and they’re typically hired through staffing agencies. While benefits are often limited, temp jobs can sometimes lead to a permanent position. 

On the other hand, employers hire seasonal workers to handle predictable busy periods, like holidays or harvest seasons. These demand spikes are typical in the retail, agricultural, and tourism industries. While some seasonal employees return year after year, their jobs generally end once the season ends. 

What does the law say about hiring for seasonal work?

FLSA

According to the Fair Labor Standards Act, non-exempt seasonal workers must at least receive the minimum wage and overtime pay for any hours worked beyond 40. Generally, the FLSA doesn’t limit the number of hours an employee can be scheduled to work per day or week, except for youth workers.  

Federal law limits how much minors under 16 can work. They can work up to 8 hours a day and 40 hours a week when school is out. However, when school is in session, they can only be scheduled to work for 3 hours per day and 18 hours per week. Additionally, minors under 16 can’t work after 7 pm and before 7 am. From June 1 to Labor Day, minors under 16 can only work until 9 pm. Remember that states may have their own labor laws for minors, so it’s always a good idea to double-check those regulations as well.

Also read: Child Labor Laws by State + Federal (2024)

But some amusement or recreational businesses can be exempt from the FLSA rules around minimum wage and overtime rules as long as they satisfy any of the following conditions: 

• If they don’t operate for more than seven months in any calendar year. 
• If their average receipts for six months during the preceding calendar year is at most 33.33% than the receipts of the other six months. 

The first condition is simple—it’s all about how long a business operates during the year. So, if a business is only open during summer, typically from June to August, it meets the criteria. 

The second condition deals with revenue. Even if the business operates for over seven months or year-round, it can still qualify for the exemption. How? If the revenue earned during the six busiest months is 33.33% or less compared to the slowest six months, the business can be exempt from wage and overtime rules under the FLSA.

IRS

When it comes to taxes, the IRS treats seasonal employees just like any other workers. 

You’re responsible for withholding, depositing, reporting, and paying employment taxes. Seasonal employees must also be asked to submit necessary tax forms to you, and you must turn those in to the IRS and Social Security Association (SSA). 

But just like the FLSA, there can be stipulations here, too. Take the Affordable Care Act (ACA), for instance.  

Under the ACA, not all companies must provide health benefits, but Applicable Large Employers (ALEs)—those with an average of 50 or more full-time employees—must offer affordable healthcare coverage. So, how do you know if a seasonal employee is eligible for ACA coverage?

One way is to use a look-back measurement period to track an employee’s hours over 3 to 12 months. They may be considered full-time if they average 30 hours or more per week during the look-back period. If they qualify, employers must provide healthcare benefits for as long as the measurement period, which can be up to 6 months. Even if their hours decrease later, their benefits must remain in place. The look-back method helps businesses that experience fluctuations in their schedules stay compliant and avoid penalties.

Seasonal workers vs. seasonal employees under the ACA

Labor compliance is always about making sure you get the wording right. Under the ACA, seasonal employees and seasonal workers may mean different things because they are applied in different contexts. For instance, “seasonal employee” is used to determine if an employee is full-time under the look-back method. “Seasonal workers,” on the other hand, is used to determine whether an employer needs to follow the ACA’s employer mandate based on the total number of employees for that year. 

Family Medical Leave Act (FMLA)

Seasonal workers can qualify for FMLA, especially if they are recurring seasonal employees who have worked regularly for the same employer over the years. 

The Family and Medical Leave Act requires employers to provide up to 12 weeks of leave to eligible employees under certain circumstances. It applies to employers that employ 50 or more individuals during each of 20 or more calendar workweeks in the current or preceding calendar year. Under the FMLA, seasonal employees count toward the 50-employee requirement.

How do you know if a seasonal employee qualifies? If they worked for an employer for at least 12 months, which can be accumulated throughout their employment. Aside from that, the employee must have worked at least 1,250 hours during the 12 months. 

Tips for minimizing the legal risks when hiring seasonal workers

For many employers, hiring seasonal employees is a must during the holiday season. As employers depend on seasonal employment to beef up their staff in anticipation of a holiday shopping rush, it is important to remember that hiring seasonal employees—as with hiring any employee—requires adherence to specific employment guidelines. To minimize some of the issues associated with hiring seasonal employees, employers may want to consider the measures outlined below.

Avoid litigation land mines.

Hiring seasonal employees comes with its own set of legal challenges, and employers need to be vigilant. Make sure you’re up to date on employee classification and compensation rules. If anything seems unclear, seeking legal advice is always a smart move to ensure compliance.

Employers must also remember that federal, state, and local laws prohibiting employment discrimination, harassment, and retaliation apply with equal force to seasonal employees. Accordingly, employers should take the same care in preventing and addressing allegations of discrimination, harassment, and retaliation against seasonal employees as with regular employees.

Make it clear.

Although seasonal employees are generally aware that they have been hired only temporarily, employers must specify the limited duration of employment upfront. Employers should consider requiring seasonal employees to acknowledge, in writing, that they understand they were hired for a limited duration. Employers should also clarify to seasonal employees that they are “at-will” employees: Their employment may be terminated with or without cause at any time (even before the end of the holiday season).

Provide proper paperwork.

Seasonal employees must complete all paperwork required for employees under federal or state law. For example, all seasonal employees must complete federal I-9 forms to prove their employment eligibility in the United States. Additionally, employers should ensure that seasonal employees who are minors have acquired permits authorizing them to work.

Keep track of hours and overtime.

Employers must make sure they follow all state and federal wage-and-hour laws during the holiday season. This includes ensuring that employees take required meal breaks and that overtime is accurately recorded and paid. Also, employers must comply with all wage-and-hour laws applicable to minor employees.

Consider NDAs.

Protect confidential information when filling a seasonal role. If seasonal employees can access the company’s confidential or proprietary information, an employer may want to consider requiring a nondisclosure/confidentiality agreement.

Simplify seasonal hiring with Workforce.com

Seasonal employees provide flexibility to handle busy periods, but managing them can get tricky. Workforce.com can help streamline some of the things involved with managing seasonal employees. Here are some of the ways:

Hiring

Workforce.com’s applicant tracking system speeds up the hiring process for seasonal positions. For instance, you can set pre-qualifying questions to quickly filter out candidates who meet your requirements so you can move them straight to interviews. Every step is tracked and documented, keeping applicants in the loop and ensuring your hiring process runs smoothly.

Onboarding process

Seasonal employees still have paperwork. Workforce.com’s onboarding system makes it easy for new hires to submit their information, sign contracts, and complete forms quickly.

Time and attendance tracking

Time and attendance tracking is crucial for managing seasonal employees, especially when determining their eligibility for certain benefits. Workforce.com ensures that everything is logged accurately.

Payroll

With automated timesheets and correct classifications, Workforce.com’s payroll software ensures your seasonal employees get paid on time and correctly, including any overtime or taxes owed.

No matter the time of the year, managing seasonal employees can be easy with Workforce.com. Stay organized and compliant with Workforce.com. Book a demo today to get started.