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Keep Cool When Complying with Seasonal Employment Laws

Human Resources

With high schools and colleges out for the summer, businesses such as retailers, landscapers, and restaurants may be considering hiring seasonal workers to help cover a surge in demand. However, doing so requires that businesses be aware of certain regulatory factors in order to stay in compliance. Keep the following in mind if you’re considering adding seasonal staff.

Follow your onboarding process.

First, determine the worker's classification and collect the right tax forms – a W4 for employees and a W9 for contractors. Plan to set up your payroll to withhold taxes where appropriate, or send a 1099 form to contractors. Then, for those workers who are seasonal, your company should follow its standard onboarding process for new employees. In addition to the application process, ensure that each worker receives the appropriate training and briefing on company policies. Will this person be an employee working set hours in a store, for example, or an independent contractor working on their own schedule?

Fair Labor Standards Act regulations protect seasonal staff members.

Comply with all applicable laws when hiring seasonal employees. You may be familiar with those that are enforced by the Department of Labor (DOL), including the Fair Labor Standards Act (FLSA). The FLSA regulations that apply to seasonal employees include minimum wage, overtime pay, recordkeeping, and child labor. The FLSA requires employers to pay non-exempt employees at least minimum wage for hours worked up to 40 hours each week. Any hours worked over 40 hours per week must be compensated at an overtime rate of 1.5 times the employee's regular rate of pay. Ensure that you're properly tracking employee time worked as well as their attendance. Keep in mind that state and local laws and regulations may also apply.

Understand the impact to employer shared responsibility in the Affordable Care Act.

When determining whether a company is an applicable large employer (ALE) subject to the Affordable Care Act’s employer shared responsibility (ESR) provisions, there is a stipulation that points specifically toward seasonal workers. As the IRS states, "If an employer's workforce exceeds 50 full-time employees for 120 days or fewer during a calendar year, and the employees in excess of 50 who were employed during that period of no more than 120 days were seasonal workers, the employer is not considered an applicable large employer."

If it’s determined that an employer is an ALE, seasonal workers still need to be assessed as to whether they are full-time for the purpose of ESR. However, they may use an initial measurement even if they are reasonably expected to work full-time (as defined by ESR) if the employer is using a lookback measurement period. This is not true of non-seasonal workers who are reasonably expected to work full-time.

Employers with questions about how this impacts their business or how to make this calculation should consult a knowledgeable HR professional or legal counsel.

Seasonal staff can help you maximize profits during the summer season as well as other busy times of the year. However, this requires that you be aware of employment laws and regulations that impact the employment of these workers in your business. Get up to speed on applicable laws and regulations so you can make the most of this flexible workforce.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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