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The Top HR Challenges When Offering Seasonal Employment This Summer

by Karyn H. Rhodes | SHRM-SCP, SPHR on Apr 26, 2022 9:26:56 AM

20-25% of companies hire additional workers for the summer. If you’re in the hospitality, retail, landscape, or other industry where summer is one of your busiest times of year, then you’re likely one of those offering seasonal employment. But before you start hiring, it’s important to understand the HR challenges that you need to be aware of.

To help you best prepare for bringing on seasonal workers this summer, here we’ll cover the top concerns and how to address them. After reading this, you’ll be ready to put workplace policies in place to keep you in compliance with applicable workplace laws and regulations.

7 HR Challenges with Seasonal Employees

Seasonal employment is when an employee works for a period of time, generally 6 months or less, during the same season each year such as summer or winter. For businesses that have more customers during the summer, these temporary seasonal workers are critical to providing much-needed extra help. To ensure your hiring is compliant, these are the top 7 HR concerns to be aware of when bringing on your seasonal workforce.

1. Hiring Interns

If your business uses interns in the summer, it’s important to know that the DOL changed the rules a few years ago that determine whether an intern must get paid. The current test to decide if interns of for-profit companies count as employees under the Fair Labor Standards Act (FLSA) has seven factors, no one of which is determinative.

  • The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  • The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  • The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  • The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  • The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  • The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  • The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

If the analysis reveals that they’re actually an employee, then they’re entitled to minimum wage and overtime pay, which we’ll discuss in a bit. 

2. Correctly Classifying Seasonal Employees 

Just like your regular employees, you’ll want to ensure you classify workers correctly. Most seasonal workers will be considered non-exempt versus exempt workers. This means that they’re eligible for federal minimum wage and overtime pay protections under the FLSA and may be protected by state wage and hour laws as well. It’s important to note that some seasonal staff are exempt from minimum wage and overtime rules, which we’ll address later. 

While it can be challenging to determine the right classification, the two factors to consider are:

  • Salary: Employees classified as exempt must be paid on a salary basis at generally not less than $455 a week
  • Duties: Employees who perform certain duties are exempt, including: executive, administrative, professional, computer, and outside sales.

It’s also important to ensure you classify your summer workers as employees and not independent contractors if you exercise control over the worker and how they perform the work.

3. Offering Seasonal Employment to Youth Workers

Many students look for summer jobs, and you’re allowed to hire children even as young as age 14. But you’ll want to make sure you’re following the Department of Labor rules to keep these workers safe. Specifically:

  • 14 and 15-year-olds: If you’re hiring 14 or 15-year-olds, they can only work for limited periods of time in non-manufacturing and non-hazardous jobs. There’s a list of permitted occupations for these workers.
  • 16 and 17-year-olds: These teens may be employed for unlimited hours in any job other than those declared hazardous. The restricted occupations can be found here.

It’s important to pay attention to these employment provisions or you risk a civil monetary penalty of up to $11,000 for each minor employed in violation.

4. Health Benefits for Seasonal Staff

Most employers don’t offer group insurance benefits to seasonal employees. However, if you have 50 or more full-time employees, you have to be aware of the Affordable Care Act’s employer mandate.

If you use the monthly measurement to determine full-time employees, you’d need to offer coverage to all workers who work at least 30 hours per week, including those who only work for you on a seasonal basis. However, if you use the look-back method, you may not need to treat seasonal staff as full time during the initial measurement period and may exclude them from health insurance.

While the law offers flexibility for businesses that rely on a seasonal workforce part of the year, you’ll want to make sure you understand the rules to determine whether to extend health benefits to these workers. 

5. Temporary Worker Visas

One way many businesses combat the shortage of summer employees is by relying on foreign workers who hold either a J-1 foreign student visa or H-2B visa. 

The J-1 Summer Work Travel program is offered through the Department of State and is specifically for students with at least a semester of post-secondary academic study at an institution outside of the US. If you’re looking to hire college students or recent grads, this program can be a good option. 

The H-2B nonimmigrant program is a little more general and allows you to temporarily hire nonimmigrants to perform nonagricultural labor or services in the US regardless of their student status. If you’re interested in this program, you’ll need to file an Application for Temporary Employment Certification with the DOL and be granted registration before you can start recruiting. In addition, you’ll need to comply with the program’s many requirements. For example, you must pay a wage that equals or exceeds the highest prevailing wage or applicable local, state, or federal minimum wage for the occupation in the area.

6. Minimum Wage and Overtime Pay

Since most seasonal workers are nonexempt, they’ll be entitled to the minimum wage and overtime protections. That means you’ll need to pay them the federal minimum wage – or a higher rate if your state requires it – and one and a half times their regular wage rate for all hours worked over 40 in one workweek.

However, there are some seasonal businesses whose workers are considered exempt from these rules. To qualify, yours must be an amusement or recreational establishment that either:

  • Operates less than 7 months a year
  • Has the monthly average from the smallest receipts for any 6-month period less than 33 1/3% of the monthly average from a 6-month period where receipts were the largest 

7. Time Off Requests & Coverage

You’ll likely get many requests for time off over the summer – even from seasonal workers. While it’s understandable employees will want to take vacation days or need sick time, it’s important to make sure you remain adequately staffed so advance notice is critical. Be sure your employee handbook clearly communicates the procedure for asking for time off. To help manage requests, you may want to consider a time and attendance system that automatically calculates accruals based on your policy and allows employees to submit requests online.

And don’t forget to consider protected leave like state-mandated sick leave, which applies for seasonal and part-time workers as well as full-time employees.

How to Keep Seasonal Work Compliant

While seasonal employees may only work for your business for a short time, that doesn’t mean the rules for offering employment are any less daunting; HR concerns are similar whether you bring staff on to work just a few months or all year long.

To get your seasonal workers started off on the right foot, read our guide to onboarding. For help with offering seasonal employment compliantly, visit our dedicated HR page to learn what type of assistance Complete Payroll Solutions offers.

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