5 Things to Know Now about Hiring Temporary or Seasonal Workers

Does your business ebb and flow with the seasons? Looking to hire extra staff for the holidays or tourist season?  Whatever your plans, 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, this Employment and Labor Law Guide for small businesses is a good reference point.

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 (more on this here).

SBA offers some helpful tips to understanding the difference between independent contractors and employees when it comes to your legal and tax obligations.

What Benefits Are Required by Law?

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. Refer to the employee's Form W-4 and the methods described in the IRS’ Employer's Tax Guide and Employers Supplemental Tax Guide (PDF).

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.

Other Legal Considerations

Want to run a background check on potential seasonal workers? This blog offers advice on Conducting Employee Background Checks – Why Do It and What the Law Allows.

Depending on your business type, you might consider asking seasonal workers to sign a Non-Disclosure Agreement or contract of employment.

Got questions about hiring seasonal workers? Post them in the SBA.gov Community Discussion Boards.

About the Author

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley