For many small business owners, including those in the tourism business or those catering to warm weather activities, summer means “go” time.
You wait all year for this busy time, and you don’t want to miss any business because of lack of preparation. In fact, you may be looking to add some extra staff members to handle the extra work.
Seasonal employees are defined as workers hired on a part-time or full-time basis to provide temporary help during a busy season, such as summer or the winter holidays. High school and college students, teachers or others seeking to supplement their regular income all are good candidates for seasonal positions.
Here are some tips for hiring seasonal workers for your small business.
Labor Laws Apply to Seasonal Workers
Under the Fair Labor Standards Act, both part-time and full-time seasonal employees have the same rights concerning overtime pay, minimum wage, recordkeeping, harassment, workplace health and safety and child labor regulations.
If you need a refresher on these workplace laws, check out https://www.sba.gov/content/employment-and-labor-law at the Small Business Administration website.
Independent Contractor or Employee?
It is important that you understand the difference between independent contractors and seasonal workers. Independent contractors are essentially self-employed workers who may or may not take on seasonal positions. These contractors offer expertise in certain areas and often work unsupervised or even off site as part of your team during your busy season.
Since independent contractors are not your employees, you do not need to provide benefits, pay unemployment taxes or withhold taxes, Medicare or Social Security from their salaries. You also cannot mandate the number of hours an independent contractor works.
You are required to report to the IRS compensation of $600 or more to each independent contractor. Talk to your accountant or your attorney if you have any questions about the tax and accounting implications of independent contractor versus employees.
When a person’s work is integral to the business, that person is usually defined as an employee. Visit http://www.irs.com/articles/temporary-employee-and-independent-contractor-tax-issues or talk with your tax or legal professional if you are unsure of your worker’s status.
Tax Withholding on Seasonal Workers
You are responsible for withholding Social Security and Medicare for seasonal employees just as you do for your regular staff members. For more specific tax information on seasonal workers, visit http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Part-Time-or-Seasonal-Help.
Some Benefits May Apply to Seasonal Workers
Your seasonal workers may be entitled to workers’ compensation or unemployment compensation. Since these regulations vary by state, check with your state Department of Labor for specific guidelines.
The law does not require you to offer the same “fringe” or “soft” benefits that you offer to your regular staff to your seasonal workers. Offer vacation time, paid leave and other benefits at your own discretion.
Because of the temporary nature of the length of the employment for seasonal workers, you should consider background checks on the employees you interview.
Dishonest or disruptive workers can damage the integrity of your business or negatively affect your other employees. A survey from Jack L. Hayes International, a loss prevention consulting company, reveals that employees steal 5.4 times more from retail companies than shoplifters do.
Don’t let down your standards when hiring seasonal workers. Follow the same screening methods you use with your regular staff.
You do need to get written permission from your job candidates before conducting any background screening, according to the Fair Credit Reporting Act. Many businesses also choose to conduct drug tests on temporary hires. These tests can help reduce your liability in the event that something goes wrong while the worker is with your company.
Depending on the nature of your business, you might also want to ask your seasonal workers to sign a Non-Disclosure Agreement (NDA) or a contract of employment. There are many free contract templates online, but it is best to consult your attorney, since laws vary from state to state.
Hiring seasonal workers is a great way to help take care of your clients or customers during the busy summer season. Just be sure to follow the same due diligence you follow in all aspects of your business to find the best people for the positions so that your small business continues to grow and prosper.