Seasonal job positions are integral to many businesses—big and small—remaining operational. These positions are typically filled during a company’s busiest or peak business time when extra help is needed (holiday rush), or a particular season that corresponds to the business (landscaping or ski mountain). Retail, agriculture, food and beverage, or tourism and hospitality all hire seasonal employees at many different times of year.
It’s common to mistakenly think of seasonal employment as a part-time job, but in reality it is quite different. Seasonal employees are defined as short-term, temporary employees that work 120 days or less in a year. These days can be at any time of year and don’t necessarily need to be consecutive days or months. Because seasonal employees are defined differently from part- or full-time employees, there are five things to keep in mind when hiring.
Do Seasonal Employees need to file taxes?
Yes! Every single employee that you hire must file taxes if they are of eligible employment age or under age 65, a single filer, and their income is at least $10,400 for that year. They must also fill out a W-4 form, which calculates their federal income tax to be withheld. You’ll need this form later on when you do your business taxes.
Side note: If your employees receive at least $20 per day in cash tips, they should be reporting that when they file their taxes.
Do I have to withhold taxes from their paychecks?
Yes, you should be withholding taxes on all your employees’ paychecks regardless of if they’re seasonal. Consider using a part-year withholding method for when employees work less than 245 days of the year. This allows your employees’ withheld taxes to be adjusted based on the duration of the time they worked rather than a typical 12-month calculation method for regular employees. This is so employees don’t have too much in taxes taken from their paychecks.
Am I obligated to offer my seasonal employees benefits?
Yes and no. There are state required benefits that you need to offer all your employees regardless of classification. These benefits include:
- Social Security and Medicare: you’ll need to withhold wages as defined on their w-4 and match the contributions
- Worker’s Compensation Insurance: this requirement varies by state however, NH and ME require workers comp insurance
- Unemployment Insurance: this also varies by state and unemployment eligibility is based on factors such as duration of employment, income earned and reason for termination
So called “fringe benefits” such as paid time off, sick leave and medical insurance to name a few, are not required and are at your company’s discretion whether to offer them to seasonal workers. Be sure to make these benefits (or absence of) explicitly clear when hiring and providing onboarding materials.
How should I handle hiring for seasonal positions?
You should treat seasonal positions with the same care you would when filling full-time positions. Run background checks, check personal and professional references, and host an in-person or virtual interview with them. Even though they’re seasonal, they may come back to work for you again next year or you may want to offer them a full-time, year-round position.
Do I need to track time and attendance of seasonal employees?
Absolutely. You should track time and attendance of all your employees for your business’s records, your employees’ personal records, for federal and state tax reasons and for maintaining compliance.
Since a seasonal employee cannot exceed working 120 days in a year, you’ll need to be especially aware of how many hours they have worked. If they are nearing 120 days but there’s still time left in your busy season, you must give them days off or change their employment status. By tracking hours carefully, you’ll be able to ensure they won’t work over their limit and cause undue challenges.
There may be other guidelines in your state or locally that are or are not required in other places. For best practice, and to make sure your business is running optimally, consider meeting with your company’s HR representative or an outside HR resource when hiring seasonal employees.
At Payroll Management we help businesses stay in compliance with state and federal agencies when it comes to seasonal employees. If you want your business to run efficiently and without unnecessary hassle, we’re only a conversation away.
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