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Things to Know About Hiring Seasonal Employees

woman in a santa hat and garland holding a christmas gift

Each holiday season, retail and highly-trafficked shopping retailers begin hiring more workers to cope with the increased amount of shoppers. As shoppers search for the perfect gift for their friends and family this holiday season, employers need to know the benefits, concerns, and other navigable issues when hiring, training, and working with seasonal workers. 

The National Retail Federation estimated in 2021 that retail sales increased between 6-8% during November and December. Over 10 years, holiday retail sales have averaged about a 4.9% increase–including during the pandemic years of 2020-2021. In fact, pandemic sales account for a large percentage of this increase. Holiday sales for 2022 are expected to reach up to $960.4 billion. But what does this mean for HR and retailers looking to hire seasonal workers? Below, you’ll find all you need to know about seasonal workers, including how to classify them versus other types of workers, onboarding seasonal workers, the benefits of hiring seasonal workers, paying them, seasonal contracts, vacation time, age restrictions, and taxes. 

When Are Seasonal Employees Hired? 

Seasonal workers are typically hired during the same time each year. Seasonal workers are categorized as employees that work six months or less in a predetermined time frame (typically during the holiday season). These employees are usually hired for the holiday season when stores become even busier. Although seasonal employees are more common in retail stores during these periods, seasonal employees can exist elsewhere in other industries. 

What are Seasonal Employees? 

Full-time and part-time seasonal employees are hired specifically to cover shorter periods. They are temporary employees that can help out during busier seasons (typically October through December/January) so that stores do not become overwhelmed by the increase in traffic. But aren’t there multiple types of temporary employees? Yes, there are six different types:

  • Temps: are employees who find temporary employment through an outside agent–but aren’t designated for specific periods, like seasonal workers. 
  • Contract workers: also known as independent contractors are hired for specific projects/services for a short period. 
  • Consultants are professionals hired to advise other companies–this can be temporarily or through a long business-to-business relationship. 
  • Freelance workers: are similar to contractors in that they are both independent contractors, but freelance workers are paid on a per-task/project basis, while contract workers may be compensated differently for the long term. 
  • Interns: are workers–either paid OR unpaid–that are offered work experience by a company. This job is typically focused on earning work experience more than monetary gain. 
  • Seasonal workers: are similar to temps in that they are hired for a temporary period but are more similar to contractors as they work for specific seasonal periods each year. 

Compared to the other categories listed above, seasonal workers are clearly defined by government policy under the Affordable Care Act with specific benefits and protections. Because they can be full-time employees–even if for a short time–they are given the same protection as non-seasonal full-time employees. This includes discrimination protection, sexual harassment protections, and sick leave (depending on your state), among many other governmental protections. Despite their seasonal status, ensure your company’s policy clearly states that these protections cover all employees regardless of their status. The basic qualifications seasonal workers must fulfill are: 

  1. Work for six months or less (although certain companies say four months or less)
  2. Work in a suggested time frame that does not change year to year (typically November to January)
  3. Work either full-time OR part-time

However, seasonal employees are not legally required to be given the same benefit opportunities as full-time non-seasonal employees, such as benefits sponsored by the company, additional bonuses for full-time employees, and even vacation time (outside of the required sick leave). However, if these seasonal employees are hired for more than six months, they qualify for these benefits. 

Onboarding & Offboarding Seasonal Employees

Although onboarding and offboarding vary by company, some things across the board can make your life easier when onboarding and offboarding seasonal employees. The Great Resignation of 2021-2022 may make this year’s holiday season the most challenging, so ensuring a good onboarding process is vital. 

One of the biggest things you can do to make the onboarding and offboarding process easy is to start on the right foot. You can set out to do two things beforehand to make your life easier. The first is setting up your onboarding process through a streamlined and systematic system. This system can vary on an individual basis, but preparing steps for onboarding, like what positions seasonal employees will be in, what they should know for that position, and any benefits they need to be aware of, and steps for offboarding such as exit interviews, returning physical property, and post-employment payment will make everyone’s lives more manageable later on. The second thing you can do is treat your seasonal employees as long-term working shorter periods. If you treat your seasonal employees as completely temporary and will never see them again after this system, the payoff for hiring and maintaining temporary employees becomes more difficult. However, if you treat seasonal workers with the potential of returning, onboarding them and affording them more benefits will all seem even more worthwhile than just for this single holiday season. 

Benefits of Hiring Seasonal Employees

While there are specific concerns regarding hiring seasonal employees, there are also many benefits. Seasonal employees are always a great help when business is busier than ever. Because of the temporary period they work, seasonal employees are a lower business expense as they’re hired for such a short time. Many seasonal employees are also part-time workers, meaning they will only add a little time and extra costs to your company’s payroll. Depending on the retailer, some seasonal employees may not make the same as full-time employees due to part-time work or other reasons–but they also might make more based on the expected demand from consumers. 

Hiring seasonal employees also incurs less risk for the employer and boosts company morale. If the employee doesn’t make an excellent fit for the company, there won’t be as many repercussions for either party, as the employee can simply finish their short time as an employee. Moreover, because extra workers are available, full-time and seasonal staff alike will be less stressed with how much work there is to be done with extra hands around to take on the load. Less stressed employees mean a happier and healthier work environment! 

Paying Seasonal Employees (Minimum Wage vs. Overtime)

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Seasonal employees range in wages just as they range in availability. Some seasonal employees may only be part-time workers and thus will be paid less than those who work 40+ hour weeks. Seasonal workers also aren’t required to be paid the same amount as full-time employees due to their temporary status but do at least need to be paid the minimum wage of the state they work in. However, more than minimum wage might be necessary, even for seasonal workers, due to the Great Resignation and the surge for worker’s rights. As employers are struggling to find long-term employees, it may be a good idea to promote flexibility and higher pay for the holiday season. Because it’s a busy time of the year, too, you may need to schedule workers for overtime–in which case, just like full-time employees, seasonal workers need to be paid for overtime.

How Long Do Seasonal Employee Contracts Last?

Seasonal employee contracts can last as long as 4-6 months and as short as a few weeks. Although seasonal workers aren’t relegated solely to the winter holiday season, many employers hire more during this time than any other due to the influx of consumers in search of holiday gifts and flush with holiday bonuses. Seasonal workers can also be hired for large sales retailers who know they will have larger projects that need more hands on deck, such as the grand opening of a store. It is up to the employer to decide how long a seasonal employee will be required, so it’s always a good idea to estimate how busy your store/company will be and to count how many extra hours and hands will be needed to maintain a successful and efficient season.

Seasonal Employees and Vacation Time

Seasonal employees are not full-time/long-term employees, so businesses are not required to provide vacation time. Because they have been hired for such a short period to cover and/or fill in for those who may be guaranteed vacation time, it doesn’t make sense to give them long periods off when they won’t necessarily have the opportunity to use it. While employers can offer seasonal employees vacation time if they feel inclined, the U.S. Department of Labor does not require it.

However, seasonal employees must be given the necessary amount of sick leave. Although they are temporary workers, all laborers are entitled to unpaid sick leave under the Family and Medical Leave Act of 1993. Paid sick leave, however, has no federal requirement and is thus up to the employer’s discretion.

Minors as Seasonal Workers

As the holiday season approaches, young high school students may be looking for opportunities to make extra cash to purchase gifts for their loved ones. College students, too, will be returning home during their Thanksgiving and winter breaks and may also be looking for extra temporary employment opportunities. The holiday season is the perfect time for high school and returning college students to pick up extra shifts at local businesses. However, businesses need to be wary of age-restricted labor laws. With the Fair Labor Standards Act (FLSA) passing, non-agricultural jobs can hire workers as young as 14 years old with hourly restrictions. Those under 16 are also given these hourly restrictions. Those workers under age 16 may not:

While there are hourly restrictions for those under 16, there are other restrictions for those under 18. For example, employees under the legal age may not work with hazardous materials or machinery or in hazardous occupations. Moreover, the FLSA establishes baseline minimums for employees under 20, full-time students, student-learners, apprentices, and disabled workers. Therefore, businesses should double-check that they are following all child labor laws and regulations so that individual employees will be protected and safe. More importantly, safe and happy workers will create a safe and comfortable environment for all workers.

Taxes

As an employer, you will be required to still send out W-2 tax forms to all employees, including seasonal workers. Seasonal employees are subject to the same tax laws and deductions as all other types of employees–including full-time employees. However, because they work for such a short period, they may not need to file taxes if they make below the standard deduction. If any seasonal employees work overtime, they will most likely make the standard deduction. And if they worked more than one job during the season, too, they will still need to file taxes and may end up owing tax money.

Time to Hire!

As the holiday season approaches and consumer activity ramps up, now’s a great time to brush up on the laws, regulations, and tips for hiring seasonal workers. It’s essential to know whom you can hire, when you can/should employ them, and any restrictions regarding hours, wages, and taxes. Hiring more help for the season will ease the strain for all involved, but it’s essential to keep up with the latest in seasonal employment. Now that you’ve read everything you need to know about getting started, it’s time to begin seasonal employee hiring!

If you need additional help learning the ins and outs of seasonal employees, HR, or any other business operations, contact Canal HR. We are experts in the HR industry and can handle the paperwork and HR-related tasks so you can focus on running your business. Contact us today to get started!

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