Hiring Seasonal Workers? 6 Compliance Issues to Consider

Many employers' hiring needs increase as the temperature rises. Even though seasonal workers are temporary, employers must still ensure compliance with applicable federal, state and local laws, and regulations governing their employment. Here are six compliance issues to consider when hiring seasonal workers.

1. Job postings

Several states and local jurisdictions require private sector employers to disclose the pay range for a position to an applicant (or employee). These laws generally have one or more of the following requirements:

Employers must provide the salary range upon request of an external/internal applicant.
Employers must provide the salary range to applicants automatically at a certain point in the hiring process (e.g., at the time a job offer is made).
Employers must include salary range information in any job posting.

The laws don’t typically make exceptions for seasonal hires.

2. New hire paperwork

Whenever hiring a new employee, employers must complete certain paperwork, including:

Form I-9. Employers must complete and retain a Form I-9 for all new hires. Like other new hires, seasonal workers must provide documentation that verifies their identity and their authorization to work in the United States from a list of acceptable documents. In some cases, a minor may not have a document that verifies their identity, such as a driver's license issued by a state. There are special procedures for such cases. There are also special rules for whether a new I-9 must be completed for returning seasonal workers.
Form W-4. All new hires must complete a W-4 to determine the amount of federal income tax to withhold from their wages. Several states also require a tax withholding form. Employers should ensure that they are using the latest version of the form, which may change each year. If the employee has questions or asks for advice on how to complete a W-4, instruct them to speak with a tax advisor.
Notice of Coverage Options. Under the Affordable Care Act (ACA), employers must provide a Notice of Coverage Options to all new hires within 14 days of their start date. This requirement applies even if the employer doesn't offer health insurance and/or the employee is not eligible for health insurance.
Wage and hour. Under federal law, employers that use the tip credit must first notify tipped employees:
- Of the minimum cash wage that will be paid;
- Of the tip credit amount, which cannot exceed the value of the tips actually received by the employee; and
- That all tips received by the tipped employee must be retained by the employee, except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips.
State and local notices. Many states and local jurisdictions also require that employers provide specific notices to employees at the time of hire. These required notices may cover state disability insurance, state-run retirement programs, leave entitlements, harassment and discrimination, workers' compensation, unemployment, and other employment-related benefits and protections. Many states require employers to provide, in writing: the employer's business name, address and telephone number; the employee's rate of pay and regular payday; and certain other information. Provide new hire notices in accordance with your state and local requirements.
New hire reporting. Federal law requires that employers submit certain information to their state regarding each new hire within 20 days of the employee's start date, but several states have shorter timeframes. The law defines a "new hire" as:
- An employee who has not previously been employed by the employer; or
- Was previously employed by the employer, but has been separated from such prior employment for at least 60 consecutive days.

New hire reporting is included in many RUN Powered by ADP® (RUN) packages. If you have to fulfill these responsibilities on your own, you may have several options, such as submitting the new hire's W-4 or an equivalent form. Check your state's new hire reporting program for details.

3. Minimum wage and overtime

With limited exceptions, federal law requires employers to pay all nonexempt employees at least the minimum wage for all hours worked and overtime whenever they work more than 40 hours in a workweek (some states require overtime in additional circumstances).

Exempt occupations

Federal law includes exemptions from its minimum wage requirements for certain types of occupations, such as any employee of an amusement or recreational establishment, if it: (1) operates for seven or fewer months in any calendar year or (2) has average receipts for any six months in the preceding calendar year that were no more than one-third of the average receipts for the year’s other six months. Occupations that satisfy certain salary and duties tests are also exempt from the federal minimum wage (and overtime) requirements.

Some states and local jurisdictions also exempt certain types of seasonal employees, such as camp counselors, from coverage under their state minimum wage laws. Check your state and local law for details.

Federal, state and local exemptions don’t always align. As such, an employee may be exempt from the minimum wage under one law, but be entitled to the minimum wage under another. Where these laws conflict, employers must typically comply with the one most beneficial to the employee. For each job you intend to fill, make sure you comply with applicable minimum wage rules.

Reduced minimum wage

Under federal law, employers in agriculture, higher education, or retail or service establishments may apply to U.S. Department of Labor for a certificate that allows them to pay 85 percent of the federal minimum wage to employees who are full-time students. Federal law allows employers to pay employees who are under age 20 a $4.25 minimum wage for the first 90 consecutive days of their employment.

Some states and local jurisdictions also allow employers to pay a reduced minimum wage to certain types of employees. However, federal, state and local rules on the reduced minimum wage don’t always align. For example, some states and local jurisdictions specifically prohibit employers from paying anything less than the state’s or local jurisdiction’s full minimum wage. A growing number of states that allow subminimum wage in certain circumstances are repealing those provisions.

As such, employees may be only entitled to a reduced minimum wage under one law, but be entitled to the full minimum wage under another. Where these laws conflict, employers must typically comply with the one that is most beneficial to the employee. For each job you intend to fill, make sure you comply with applicable minimum wage rules.

4. Training

Regardless of whether the employee is seasonal, providing effective training is important. These employees should generally receive the same training as other new hires in the areas of anti-harassment, nondiscrimination, safety and other important workplace issues. Additionally, if employees will be working outside during the summer, employers should provide training for staying safe in the sun and heat (e.g., information on staying hydrated, taking regular breaks in the shade and seeking protection from ticks and mosquitoes).

Certain training may be required under federal or state law. These requirements may apply regardless of whether the individual is a seasonal worker. Check applicable federal and state laws and regulations for details.

For example, California requires that employers of five or more employees provide one hour of sexual harassment and abusive conduct prevention training to nonsupervisory employees, and two hours of sexual harassment and abusive conduct prevention training to supervisory employees, every two years. Newly hired and promoted employees must receive the initial training within the first six months. Seasonal employees hired to work for less than six months must receive the initial training within 30 calendar days after their hire date or within 100 hours worked, whichever occurs first.

5. Employee classification

Some employers mistakenly believe they can classify seasonal workers as independent contractors simply because of their temporary status. The truth is, employers must satisfy specific federal and state tests, such as the IRS Common Law Test, in order to classify a worker as an independent contractor. These tests look at factors such as the nature of work and amount of control the employer has over the individual when determining employment status.

A worker is presumed to be an employee unless these narrow tests are satisfied. Employers should carefully review and apply appropriate tests before classifying any individual as an independent contractor.

6. Youth labor rules

Employers that hire minors must understand and comply with federal and state rules on the employment of minors. Generally, federal and state laws have guidelines regarding the hours and the types of jobs minors may work.

Minimum age requirements

Federal law prohibits anyone under the age of 18 from working in hazardous occupations. A list of these occupations can be found at 29 CFR §570.50 through 29 CFR §570.68. Additionally, individuals under the age of 16 are generally excluded from, among other things, manufacturing, mining, machine-tending, transportation, construction and public utility work. Minors under the age of 17 are prohibited from operating a motor vehicle; however, workers 17 or older may do so when certain criteria are met. Some jurisdictions have additional restrictions, so check your state and local law to ensure compliance.

Work permits

Many states require minors to have a work permit or working papers before they can begin employment. In states with this requirement, work permits are typically obtained through the minor's school district or the state Department of Labor. Keep work permits on file for each minor hired, if you are subject to such requirements.

Hours restrictions

Federal law and many state laws restrict the hours a minor can work. Under federal law, when school is in session, 14- and 15-year-olds can work three hours on a school day or 18 hours in a school week. When school is not in session, they may work up to 40 hours in a week. While there are no federal limits on the hours worked by 16- and 17-year-old workers, some states impose such restrictions. Check your state laws and regulations for details.