Seasonal employment can be the perfect solution for businesses that find themselves short-handed at certain times of the year. However, for many, seasonal employment raises concerns about compliance and work culture. And many find it hard to maintain consistency and high productivity levels when there is a change in staff from year to year.
In this post, we’ll address these issues and explore possible solutions for employers who take on seasonal employees. First, we’ll discuss the seasonal employment definition, and then talk about the implications and benefits for employers and employees.
Afterward, we’ll look into the specific laws that employers need to be aware of and talk about the compliance and cultural-driven issues that might surface. Lastly, we’ll provide tools and strategies to manage problematic situations and tips to ensure smooth business processes throughout the year.
Table of Contents
What is seasonal employment?
According to the Internal Revenue Service (IRS)‘s definition, seasonal employment is
“Annually recurring work periods of less than 12 months each year. Seasonal employees are permanent employees who are placed in non-duty/non-pay status and recalled to duty in accordance with pre-established conditions of employment.”
In other words, seasonal employment is when workers have when they work temporarily for part of the year. Once employees have completed work for the season, employers are no longer obligated to keep them on their payroll.
Depending on the position, employers might decide to hire seasonal employees on a part-time or full-time basis. Examples of seasonal employment include:
- Summer camps, ski resorts, and tourist businesses that only open for certain times of the year.
- Park maintenance workers might only be needed during the summer months.
- Businesses that need extra staff on hand to help out during busy seasons, such as retailers during Black Friday and the holidays.
The length of the contract and the type of the position vary depending on the employer’s needs and specific requirements. Normally, seasonal employees can be contracted anywhere from a couple of weeks to several months.
What are the benefits of seasonal employment for employers
Seasonal employment allows employers to hire employees on a temporary basis. Therefore, it can help companies control labor costs during slow moments of the year.
Also, if you are trying to scale and are also interested in hiring permanent team members, hiring seasonal staff can help you to recognize and select top talent. Perhaps one of your summer employees went above and beyond. After they complete their temporary contract, you can offer them an opportunity to stay with the company year-round.
Benefits for employees
Seasonal employment can be a great option for many workers who are looking to gain experience in a position, trying to make extra earnings while unemployed, or who might be looking for a temporary position while studying or traveling. It provides workers with extra income and does not require the same long-term commitment as a permanent working situation.
Seasonal employment laws to consider
Although they work on a temporary basis, seasonal employees are employees, and the definition of seasonal employment is different from that of independent contract work.
In the United States, employers need to consider federal, state, and local laws when contracting seasonal employees. Particularly, employers should keep in mind the Federal Labor Standards Act (FLSA), which outlines the following:
- Minimum wage
- Overtime pay (time and a half)
- Child labor laws
- Recordkeeping laws
For non-exempt employees, the Federal minimum wage is currently set at $7.25 per hour. However, employers should be sure to take state and local minimum wage and labor laws into account. If state or local laws have a different minimum wage, they are required to pay employees the highest set amount.
Additionally, employers should keep in mind that hiring seasonal employees means that they will also need to comply with overtime laws. If employees work more than 40 hours per week, they should receive one and one-half times their hourly earnings according to federal legislation. This amount might also change or increase depending on state and local law.
The Secretary of Labor also details specific regulations regarding minors. The law only permits employees between the ages of 14-15 to work in specific positions and for a limited number of hours. It also restricts employees between the ages of 16-17 from filling hazardous occupations.
Regarding taxes and withholdings, your business’s responsibilities are basically the same, regardless if you employ staff on a seasonal or permanent basis. This can vary dramatically from state to state, so it is best to check to make sure that you are up to date with current requirements for your exact location.
Seasonal employment challenges
To overcome compliance challenges, employers must always make sure that they are up to date with the Fair Labor Standards Act (FLSA) and any state or local laws. Although the federal minimum wage has not changed since 2009, individual states are continually making changes to their set wage requirements. As of 2023, 29 states have minimum wages that are higher than the current federal minimum.
Additionally, to avoid confusion when taking on new staff, make sure that you use the right type of employment contract and that your terms and conditions are clear. Specifically, you will need to explicitly state that you have a fixed-term agreement with the employee and that you are not contracting them on a permanent basis.
Seasonal employment contracts should clearly detail:
- Start and end dates
- The weekly hourly requirements. (Whether the position is part-time or full-time, or if this is a zero-hour or casual working agreement)
- Company policies and procedures, including the protocol, job expectations, and the company’s termination of contract policies
- Any extra benefits or perks that the employee will receive
Keeping up with employment laws can be tough for many professionals. And missing a deadline can come with steep consequences, like legal troubles and hefty fines.
To help stay organized and remember important dates, it’s best to use an HR compliance calendar throughout the year. That way, you can plan ahead, avoid any last-minute scrambling, and reduce the amount of confusion that you may have while managing employees with different types of contracts.
Aside from employment laws, seasonal employment can be problematic for employers regarding company culture. Namely, it might be difficult to build a cohesive work environment. Especially if your team is regularly changing and only present for a brief amount of time. Not only could this lack of cohesion affect the employee experience, but it also might negatively impact internal communication. Consequentially, this influences productivity levels, efficiency, and the overall success of your business.
Needless to say, you’ll want to do everything possible to make employees feel that they are part of a team. And to make them feel welcome from the beginning. Even though employees only have a temporary work agreement, provide them with ample training opportunities and give them a thorough onboarding. Another option is to arrange teambuilding events to give new employees a chance to meet each other.
Often, the power of team building is underestimated. And for companies that hire temporary staff, it might not seem like it is worth the investment. However, taking measures to connect and support employees can pay off in the long run. When employees feel comfortable with their fellow team members and their responsibilities, they will most likely feel satisfied and confident with their position.
Not only will this increase the immediate productivity and profitability of your business, but it will increase the possibility that seasonal employees will return to their position from one year to the next. Ultimately, you will be able to establish a level of consistency and constancy, despite the changing nature of running a seasonal business.
What’s the best way to manage seasonal employees?
In this article, we’ve gone over seasonal employment laws and techniques to better manage seasonal staff.
To sum up, employers should bear in mind:
- The federal minimum wage is currently $7.25/hour, while state, and local employment minimum wages vary. Employees should receive whichever has the highest minimum wage and overtime pay.
- Seasonal employees are subject to the same tax withholdings as regular employees.
- Workers between the ages of 14-15 can only have certain occupations and work for a restricted amount of hours. Those aged 16-17 are not allowed to have hazardous positions.
- Contracts should include key information about the position, starting and end dates, and hourly requirements.
- Taking steps to welcome new employees and foster team building will ultimately help your business grow. Even if employees are only around for a short period of time, your business will benefit from having strong communication practices.
Seasonal employment can provide companies with adequate support during their busiest moments. However, it requires some additional organization and management to bring on new staff year after year. In order to recruit new employees and provide them with a streamlined onboarding experience, your best option is to invest in an all-in-one HR system like Factorial.
Core components of Factorial’s software include shift management, automated employee clock-in, document storage, and more. From onboarding to payroll, Factorial is your one-stop solution for managing your team, whether they be full-time, part-time, seasonal, or year-round employees.