Cheryl Miles on September 18, 2014
Compliance Guidelines for Hiring and Terminating Seasonal Employees
It’s common for some businesses to experience spikes in demand during certain times of the year such as the holidays or summer. To keep up with demand, employers may bring on seasonal employees for a brief period and let them go once normal demand resumes. Because there can be confusion concerning this type of employment, it’s important for employers to understand federal and state laws. Here are some guidelines to streamline the hiring/firing process and ensure that your business remains compliant.
Hiring Seasonal Employees
Although they will only be with you for a short time, many of the same labor laws that apply to permanent workers also apply to seasonal workers. For example, employee discrimination and workplace safety laws are the same. When hiring minors under the age of 18, you will encounter the same restrictions where individuals 16 and 17 can’t perform dangerous duties. Minors age 14 and 15 have even more restrictions where they can only work limited hours. If you hire immigrant workers, you will have to follow the same protocol as you would for full-time employees.
You can learn more about the details concerning laws and regulations with the Employment Law Guide from the U.S. Department of Labor. Because there can be nuances with state labor laws, it’s also necessary to know the exact laws of your state, which you can find in this resource.
In terms of benefits, you are still legally required to offer certain ones to seasonal employees. Some of which include Worker’s Compensation Insurance and unemployment benefits. Worker’s Compensation can be through either a commercial carrier, a state insurance program or on a self-insured basis. Unemployment benefits differ depending upon your state, and this resource will let you know what’s required of you. Other benefits such as retirement, dental, paid leave, etc. are optional as long as a person has worked no longer than 120 days.
You must also withhold taxes the same way that you would for permanent employees and report them to the IRS. Finally, you are responsible for withholding Social Security and Medicare taxes from seasonal employees and pay a matching amount.
Terminating an Employee
Right from the get-go, it’s important to be up front with seasonal workers about the length of employment. You shouldn’t hint at the possibility of long-term work because it could cause issues when time for termination inevitably comes. According to Taxing Subjects, it’s smart to use a formal offer letter that “states the normal term of seasonal employment, but also should provide for early termination without cause or notice. The company should reserve its right to treat the employment as “at will” during the term and to terminate the temporary employee without cause or notice. The offer letter should also specify the firm’s expectations for behavior, dress, performance and adherence to company policies.”
One highly important thing to avoid is firing a worker based on any form of discrimination such as gender, race, sexual orientation, religion, etc. This can open a can of worms, and you can find yourself with an ugly lawsuit in some cases. Specific employment discrimination laws vary by state, but this guide from Nolo will get you up to speed for your state. Also, you should pay a terminated seasonal employee all due salary promptly to avoid any issues. Typically, you have three days after termination to do this.
Although many of the same laws that apply to permanent workers also apply to seasonal workers, there are a few small differences. Understanding how to approach this matter should keep your business compliant and prevent needless problems. Ultimately, this should provide your business with the manpower it needs and minimize any hassle.