Hiring Seasonal Employees? Here's What You Need to Know

Hiring seasonal employees is a great way to bolster a workforce during peak periods such as holidays or any time there’s a significant uptick in business activities. However, hiring and reliance on seasonal workers can present significant and unexpected challenges for employers.

The purpose of this blog is to present a broad overview of seasonal employment and compliance strategies that employers may want to consider.

Legal Considerations for Seasonal Employment

When deciding to hire seasonal employees, employers need to consider the various federal, state and local employment laws and regulations that may apply. Complying with these laws and regulations related to seasonal employees can be difficult and isn’t always straightforward. The following are common legal considerations employers may need to examine when relying on seasonal workers.

Employment Verification Requirements

Federal law requires employers to hire only individuals who may legally work in the United States – either U.S. citizens or authorized foreign nationals. To comply with the law, employers must verify the identity and employment authorization of each individual they hire by completing and retaining the Employment Eligibility Verification form (Form I-9). This requirement also applies to temporary and seasonal workers.

Form I-9 has two sections. The first is completed by the employee, and the second is completed by the employer. There are two supplements that are completed only when a preparer or translator assists an employee in completing Section 1 (Supplement A) or when rehire, reverification or name changes apply (Supplement B). The earliest an employer can ask a new hire to complete Section 1 of Form I-9 is after an offer of employment is extended and accepted. Employers cannot use Form I-9 as part of an applicant’s screening process or background check. The latest a new hire can complete Section 1 is at the end of the employee’s first day of work for pay.

Compared to other onboarding tasks, Form I-9 is unique in that employers must complete this process for every employee in the United States within a very short amount of time and in a specific way, regardless of an employer’s size. This task is a heavy burden for employers, as complying with all Form I-9 requirements can often be complicated and time-consuming. Form I-9 has multiple sections that both the employer and employee must complete within a limited time frame. Employers must physically examine and verify an employee’s identity and employability from a list of approved documents. Employers are also required to maintain and retain all Forms I-9 for a specific time period and reverify an employee’s documentation when it expires or if an employee is rehired within three years of when their Form I-9 was initially completed. Employers can find the most current Form I-9 on the U.S. Citizenship and Immigration Service’s website. Employers that fail to use the most current form may be subject to penalties under the Immigration Reform and Control Act.

Worker Classification

The influx of temporary and seasonal workers can make it challenging for employers to classify individuals accurately. Due to the temporary nature of their work, employers can mistakenly classify these workers as independent contractors. However, to classify temporary or seasonal workers as independent contractors, those individuals must satisfy the specific requirements of federal and state tests for worker classification. Accordingly, employers should carefully review and apply the necessary legal standards and tests before classifying a temporary or seasonal worker as an independent contractor.

When determining whether a worker is an employee or an independent contractor, it’s vital to know the business relationship that exists between the organization and the individual performing the services. Whether an individual is an independent contractor or an employee depends on the facts of the specific situation and different legal standards are used to assess this classification. Broadly speaking, an independent contractor is a self-employed individual or entity contracted to provide services for or perform work for another entity as a nonemployee. As a result, an independent contractor is self-employed and subject to self-employment tax. Typically, an individual is an independent contractor if the employer has the right to control or direct the results of the work and not what will be done or how it will be done. On the other hand, an individual is typically an employee if they perform services for an organization that controls how the work must be done and how it should be completed.

There is no standard test to determine an independent contractor relationship. Employers may have to apply various tests to determine whether issues of employment benefits, workers’ compensation, unemployment compensation, wage and hour laws, taxes and protections under federal employment laws, like Title VII of the Civil Rights Act and the Americans with Disabilities Act, affect their workforces. In addition, various federal government agencies and some states and localities have their own tests to determine independent contractor status.

The IRS, the U.S. Department of Labor (DOL) and various state agencies monitor compliance with employee and independent contractor classification by applying various criteria. Employers that misclassify employees may be liable for expensive fines and litigation if a worker should have been classified as an employee and did not receive a benefit or protection they were entitled to by law.

Fair Employment Laws

Under federal law, many employers are prohibited from discriminating against individuals based on certain protected traits. An employer’s size—meaning the number of employees—is a key factor in determining which federal laws the employer must comply with. For example, employers with 15 or more employees may not discriminate against individuals based on race, color, religion, national origin, sex, disability or genetic information. Employers with at least 20 employees are also prohibited from discriminating based on age against individuals who are age 40 or older. In addition, all employers are subject to equal pay requirements. It’s vital for employers to be aware of the size-based federal laws that may apply to their organizations to ensure they’re complying with all applicable laws and regulations. This is especially important for employers who have fluctuating workforce numbers or are considering hiring additional employees during busy seasons or holidays.

Employers hiring seasonal workers must navigate these employment laws to ensure compliance and foster a fair workplace. Federal antidiscrimination laws protect all employees, including seasonal workers, from discriminatory practices. Employers must ensure that hiring, promotions and work conditions are free from bias based on race, color, religion, sex, national origin, age, disability and other protected characteristics. This means that hiring practices should be fair and equitable, and any policies regarding pay, promotions or termination should not disproportionately affect seasonal workers based on these protected categories. The U.S. Equal Employment Opportunity Commission has the authority and jurisdiction to enforce various federal discrimination laws. Its authority extends to a wide range of employers and employees, including seasonal and temporary workers.

Additionally, employers should be mindful of the potential for harassment in the workplace, as seasonal employees may be more vulnerable due to their temporary status. Implementing robust training programs and clear reporting procedures can help create a safe and respectful environment. Regularly reviewing policies and practices not only aids in compliance but also demonstrates a commitment to fostering inclusivity and protecting the rights of all workers. By proactively addressing these legal requirements, employers can minimize risks and contribute to a more positive and equitable work environment for seasonal employees.

In addition to federal fair employment laws, most states have passed their own laws prohibiting employers from engaging indiscriminatory employment practices. In general, these laws provide protection for temporary and seasonal employees that is similar, though not identical, to the protection provided under federal fair employment laws. For example, many state laws protect a wider range of individuals, apply to small employers that are not subject to the federal provisions and provide different exemptions from their discrimination prohibitions. Employers should become familiar with how both federal and state laws apply to their employment practices.

Wage and Hour Laws

Employers may rely on seasonal, temporary or part-time employees to accommodate during peak periods of business. The Fair Labor Standards Act (FLSA) does not define full- or