Seasonal employees play a vital role in the workforce. Industries ranging from agriculture to retail rely on these workers to provide extra support when there’s high demand. Yet hiring them can be challenging if you don’t know where to start. This article will serve as your guide to seasonal employment laws and hiring best practices.
What Is Seasonal Employment?
Seasonal employment is temporary employment that occurs during specific times of the year when businesses need more help and usually lasts for six months or less. It’s typically part-time work, but some seasonal positions can also be full-time.
What Is the Difference Between Temporary and Seasonal Employees?
A seasonal employee is a type of temporary employee with more limitations on their length of employment. Temporary employees can work the entire year, but seasonal employees are limited to six months or less.
Temporary employment is also a broader category that includes fixed-contract positions.
Businesses hire a temporary employee when:
- More work is available, such as a short-term project, regardless of the time of year.
- A permanent employee is on maternity, family, or temporary disability leave.
Businesses hire a seasonal employee when:
- It’s the time of year when demand is very high for the industry—or there’s a lot of extra work.
The Pros and Cons of Hiring Seasonal Employees
Like all employment arrangements, seasonal employment has its pros and cons. It’s important to consider both before you begin hiring.
Advantages
- Allows businesses to meet demand during busy seasons: This helps keep customers and clients happy while boosting a business’s productivity. For example, delivery services like UPS may hire temporary drivers during the holiday season to ensure customers receive packages on time.
- Helps you save on benefits and taxes: Most seasonal positions are part-time, so businesses typically aren’t required to offer employee benefits such as healthcare. They can also lower the costs of state and federal payroll taxes that companies must pay. For example, employers are responsible for paying half of an employee’s FICA taxes—based on a percentage of pay—so lower employee pay translates into a lower tax bill for businesses.
- Offers more flexibility: Businesses may hire these employees to work nights, weekends, and other shifts when regular employees are off. They can cover more hours and help you meet demand without overburdening regular employees. This can help with burnout and employee satisfaction.
- Works as an employment trial before making permanent hires. Some businesses use seasonal employment to evaluate workers for permanent job opportunities. This allows them to determine whether someone is a good fit for a role–without hiring them permanently.
Disadvantages
- Errors or accidents are more likely: These employees don’t have as much experience with your business, so they may make some mistakes on the job. Having a sound training program can help offset this risk.
- Employees may not be as committed to seasonal jobs: Since they’re only employed for a short period, seasonal employees might not invest as much energy into their position—especially if they’re putting that energy toward finding the next gig. That’s not always the case, but it’s something to keep in mind if you’re thinking of going this route since it can impact performance, and in turn, your bottom line.
- Could misclassify workers: Some businesses wrongly classify seasonal employees as independent contractors, which means they don’t get overtime. This can cause a whole slew of headaches–including potential lawsuits.
Do Businesses Need to Offer Seasonal Workers Health Insurance?
Unless your business qualifies for an exemption, employers with 50 or more full-time (FT) or full-time equivalent (FTE) employees must offer full-time, seasonal workers health care under the Affordable Care Act.
Here’s who counts as an FT or FTE under the Affordable Care Act to determine whether you need to offer health benefits:
- Full-time employees who work at least 30 hours per week.
- FTE means a combination of employees who each work fewer than 30 hours but whose combined hours would equal a full-time employee. For example, if you had three employees who each work 10 hours a week–combined they’d work 30, and therefore would count as one full-time employee per the ACA. Again, you’ll need to offer health insurance to all full-time employees if you have 50 or more (or a combo of FTEs).
Seasonal Worker Health Insurance Exemption
Seasonal employees count among your full-time employees for ACA purposes unless your business qualifies for the seasonal worker exemption. It applies if:
- You have 50 or more employees for fewer than 120 days, and
- During the 120 days you would have had fewer than 50 employees if you excluded seasonal employees. (The 120 days don't need to be consecutive.)
For example, Cortland Construction has 40 regular full-time employees, and they hire 15 workers to work full-time from May to September. They are a “large” employer because they’ll employ more than 50 full-time workers for more than 120 days. They’ll have to offer all their workers health insurance.
Now, let’s say Brock Construction has 25 regular full-time employees and hires 30 workers to work full-time from April to June. Brock is a “small” employer because they only had more than 50 employees for less than 120 days. They won’t need to offer their workers health insurance.
What If Seasonal Team Members Work Varying Hours—Do I Need to Offer Health Insurance Then?
Seasonal team members may work full-time one week and part-time the next—in that case, would you still need to offer them health insurance?
To figure that out, you’ll need to gauge whether they worked full-time over a longer period. You can use one of the IRS’s methods—either the monthly measurement method or the look-back measurement method. You’ll have to use the same one for all employees, even your regular staff, so it’s helpful to think about how this will affect your entire team.
Below is an overview of each:
Monthly Measurement Method
You assess the employee’s full-time status every month for the current month. All full-time workers–including seasonal ones–would be eligible for health benefits in any month in which they average at least 30 hours per week or about 130 hours per month.
Here’s an example: Let’s say you hire a seasonal worker from June 1 through August 31st. They worked 140 hours in June, 125 hours in July, and 135 in August. You need to provide them with health coverage in June and August. But in July, they’ll have to pay their own premium.
Lookback Measurement Method
With this method, health insurance eligibility is based on the average number of hours worked in a past period. Here’s how it works:
The employer determines the length of the period, but it must be between three and 12 months long. During the initial measurement period, the employer tracks hours worked and calculates an average per month. If a seasonal employee works an average of 130 hours per month during the measurement period, he or she is eligible for health insurance for the next period.
During each new employment period, the cycle repeats. The employer measures the average hours worked and determines the employee’s eligibility for coverage during the next period.
Here’s an example: You hire a seasonal employee for six months. Using a lookback period of three months, they work an average of 130 hours per month. That means you need to provide health coverage for the second three months.
However, if you used a lookback period of six months, they would no longer work for you, and you aren’t providing health insurance. And if you use a lookback of one year, they only work an average of 65 hours per month, and you aren’t required to provide coverage either.
It may sound like a good idea to use a one-year lookback period to avoid paying for seasonal team members’ health insurance. But remember, you need to use the same method for all employees, which could affect your regular team members.
While a longer lookback period may make sense for your business, you’ll need to weigh the pros and cons of not offering health insurance. And according to HR professionals, employer-sponsored is the number one benefit employees consider.
What Benefits Do Seasonal Workers Get?
Seasonal workers who work full-time for an Applicable Large Employer may be eligible for health insurance benefits, depending on how the employer measures each work period.
In some situations, these types of employees also qualify for unemployment benefits. To do so, they must meet their state’s requirements for wages earned and work for a certain length of time, usually the first four of the previous five calendar quarters.
Does the Fair Labor Standards Act (FLSA) Apply to Seasonal Employees?
Seasonal workers are covered by most employment laws, including provisions for:
- Nondiscrimination
- Health and safety
- Wages and hours
- Employment taxes
- Workers’ compensation
The FLSA doesn’t define the number of hours these types of employees can work, but minimum wage and overtime rules still apply, with limited exceptions. This means they must be paid the higher of the state or federal minimum wage and paid overtime at one-and-a-half times their regular wage.
Federal overtime starts after 40 hours per week. Certain states, such as California, have their own rules. There, work in excess of eight hours per day qualifies for overtime pay.
One easy way to comply with these requirements is to use a time tracking and payroll platform, like Hourly. The platform automatically calculates wages (including overtime pay) and pays your team with just one click.
FLSA Exemptions for Seasonal Workers
As mentioned above, there are exceptions to the FLSA guidelines. These include:
- Agricultural workers: In most states, agricultural workers—seasonal or not—don’t qualify for overtime pay. New York, Minnesota, and Washington are three exceptions.
- Seasonal employees and the Family Medical Leave Act (FMLA): Employees must have worked for the employer for at least 12 months to receive up to 12 weeks of unpaid, job-protected leave each calendar year.
- Seasonal and recreational establishments: Workers employed by certain seasonal and recreational establishments, like a camp or swimming pool, are exempt from both minimum wage and overtime pay provisions of the FLSA.
This isn’t a complete list of provisions and exemptions. Review the FLSA website and your state’s Department of Labor guidelines for additional information.
Youth Employment and Seasonal Jobs
Many teens seek seasonal work during breaks in the school year. However, businesses that hire employees under 18 must adhere to child labor laws.
According to the FLSA:
- Children who are 14 or 15 years of age may be employed outside of school hours in a variety of non-manufacturing and non-hazardous jobs for limited periods and under specific conditions. They can work no more than three hours per day on a school day, 18 hours in a school week, 8 hours on a non-school day, or 40 hours in a non-school week. And the position can’t interfere with their education or health and well-being. (For a list of jobs children may not hold, visit dol.gov.)
- Children 16 or 17 years of age may be employed for unlimited hours in any occupation other than those declared hazardous by the Secretary of Labor.
Once a youth reaches 18 years old, they are no longer subject to the Federal Youth Employment provisions.
Keep in mind that internships have different requirements. Be sure to classify workers correctly based on their role at your organization, regardless of age.
Tips for Hiring Seasonal Team Members
Now that you know more about seasonal employment laws, let’s look at how you can improve the hiring process.
Before You Hire
Develop policies and procedures for working with these types of employees and add them to your employee handbook. This is important because it lays out the company’s legal obligations to employees and gives an overview of your company culture and expectations. It should also include training that instructs managers on how to work with them. If you have a Human Resources administrator, they can give you some insight on best practices.
During the Hiring Process
When you interview potential hires, set clear expectations about the duration of employment, job responsibilities, and the outcome or goal you want to achieve. This ensures new employees understand–and are committed to—your business needs. It also gives them a marker to judge their performance.
After You Hire
Give new hires the compliance and technical training they need to successfully fulfill the role. This can mean pairing them with a workplace mentor or simply providing feedback on what they’re doing well and how they can improve.
Even temporary employees need to know that they are more than just a number. Make it clear that you care about their well-being and are willing to accommodate reasonable requests. This will improve employee engagement and productivity.
Seasonal Employment Is Good for Business
Seasonal employment is a great way to boost your labor force when things get busy. However, it’s essential that you follow labor laws to the letter to avoid future complications. That includes classifying employees correctly and adhering to applicable FLSA and state guidelines.
You can even go one step further by developing an onboarding process that streamlines hiring for both managers and seasonal employees. By taking the time to prepare your business for new employees, you’ll create a better, more productive work environment for everyone involved.
1. Introducing Yourself
Your introductory email needs to pack a lot of information into a small package. Try something like this:
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Hello Jane,
My name is John Doe and I work for ABC Agency, where we provide business insurance policies to many of Dallas' rockstar small businesses.
Congratulations on your new business, Jane's Bakery. Are you wondering if you have all the insurance you need? Or if your policies will really cover you in a pinch?
At ABC Agency, we pride ourselves on providing robust, comprehensive coverage options to companies like yours with flexible, pay-as-you-go plans.
Are you available this week to talk more about how we can help? I can help you find the most affordable rates and the best policies out there.
I look forward to speaking with you soon.
Cheers,
John Doe
2. Presenting a Quote
Once you've met with your potential client, a quick reply with their quote will get the ball rolling.
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Hi Jane,
Thanks so much for meeting with me this morning. I loved touring Jane's Bakery–I can still smell those delicious chocolate chip cookies baking! You have a great location, and I'm sure you're going to do great on Front St.
After reviewing my notes, I've pulled together an insurance quote for you (attached). I recommend a business owner's policy. A BOP includes several insurance products in one: liability, property insurance, and business interruption insurance. It offers robust coverage at a competitive price.
I'll call you in a few days to see what you think about this insurance plan. In the meantime, if you have any questions, don't hesitate to email me or call me at [phone number].
Again, thank you for your time today. I look forward to working with you in the future.
Cheers,
John Doe
3. Thanks for Purchasing a Policy
Gratitude is important! It's never a bad idea to thank your clients for their business.
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Hi Jane,
Thank you for choosing a business owner's policy with ABC Agency. We know it's so important to get the right coverage for your business, and we are honoured you've placed your trust in us.
We're excited to work closely with you, and our no. 1 goal is to make sure you're business is always protected.
Do you have any questions? We are here to help. Reach out whenever something comes to mind.
Thank you again for choosing ABC Agency to insure Jane's Bakery.
Cheers,
John Doe
4. Welcome Email
A welcome email helps clients feel like you're there to help–and can softly pitch other insurance products you offer.
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Dear Jane,
Welcome to the ABC family! We are thrilled to have you as a new customer and can't wait to meet all of your insurance needs.
As an independent insurance agency, we work with multiple insurance providers to find the best coverage options for all our customers. If you need any other type of insurance–like [include additional offerings unique to your agency, like life insurance, health insurance, home insurance or anything else]–we can help you too.
Do you want to discuss any of these policies?
Cheers,
John Doe
5. Introducing a New Product
A happy client may want to expand their business with you.
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Hello Jane,
I hope all is well with you and Jane's Bakery. I stopped in yesterday for a blueberry muffin and coffee, and they were delicious. I loved the hint of cinnamon in the muffin! Was that your idea?
I wanted you to be the first to know we are now offering commercial vehicle insurance to our policyholders. Auto insurance for your catering vans is super important since your personal car insurance won't cover them.
We're offering this insurance coverage solely to our current business clients at the moment and have some very competitive rates.
Would you like me to work up a quote for you?
As always, thanks so much for being a part of the ABC family.
Cheers,
John Doe
6. Asking For Referrals
Once your relationship is established and comfortable, let your clients help you grow.
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Hi Jane,
You've been a valuable member of the ABC family for two years now, and we so appreciate your business–not to mention the muffins you supply for our monthly meetings!
Because you are a valued policyholder, I wanted to ask a quick favour. I know you are active in the local Chamber of Commerce, and I'm hoping you might know some colleagues who would benefit from working with our insurance company.
Referrals are one of the most effective ways to connect with our community since people really trust their friends, family and colleagues. Is there anyone you'd recommend I speak with?
Remember that in addition to business insurance products, we offer everything from life insurance policies to pet insurance.
As a thank you for your help, we will send you an Amazon gift card of $100 when your referrals buy insurance from us.
Thanks so much for your help!
Cheers,
John Doe
7. Policy Renewal
If your client needs to renew their policy with you, send an email like this:
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Hi Jane,
I hope you're doing well! What a year it's been—from being listed as one of the top 5 bakeries in Dallas to being an official vendor for the city—you have so much to be proud of.
Just a heads up that your business owner's policy is up for renewal soon and will expire on June 15, 2023.
If you're still happy with the coverage, we can easily renew it for you.
Do you have some time to chat this week?
Looking forward to serving you again!
Cheers,
John Doe