‘Tis the season for seasonal employees.
If there’s one thing retailers know about the holiday season, it’s that this period potentially represents as much as 20%-30% of their annual sales. According to the NRF, consumers plan on spending over 3% more this year than they did last year for the holidays.
With a series of celebrations including Thanksgiving, Christmas, and New Year’s Eve, retailers must prepare their teams for the anticipated demand by hiring seasonal employees ahead of the holiday rush. The time is now.
What is a seasonal employee?
The Affordable Care Act (ACA) defines seasonal employee as “an employee who is hired into a position for which the customary annual employment is six months or less and for which the period of employment begins each calendar year in approximately the same part of the year, such as summer or winter.”
Below is also how you can classify an employee as a seasonal one:
- “An employee who is hired into a position for which the customary annual employment is six months or less.” In other words, one who works no more than 35 hours and/or less than six months in the year, according to the ACA.
- The period of employment must begin and end around the same part of the calendar year (e.g., summer, winter, holiday season).
Did you think of an employee at your business that fit the descriptions above? Then your employee is a seasonal employee. This means you do not have to classify the individual as full-time and benefits-eligible at the point of hire.
Why hire seasonally?
Cost-effectiveness: Hiring a team of full-time employees is not the most cost-effective way to handle seasonal demands, as you likely won’t require an increased level of workforce once the holiday period is over. The last thing you’ll want is to continue paying for full-time employees that you no longer need or have the budget for.
Flexibility: With seasonal employees, you can easily adjust the size of your workforce to meet your retail store circumstances—such as during peak holiday periods, like Christmas Eve, or amid significant employee absences.
Higher morale: Unless seasonal employees are hired to meet demand during the holiday season, full-time retail employees have to take on the extra workload. If not managed well, the demands of the busy holiday season can result in overworked and stressed employees. Seasonal employees can support your existing employees by taking on that extra workload.
Your seasonal hiring checklist
Below is a checklist of steps you need to take before embarking on your search for seasonal employees.
1. Research the difference between a seasonal employee and seasonal worker
A seasonal employee is hired into a position for six months or less around the same part of the calendar year.
Examples of seasonal employees:
- Cashiers hired from November to December during the holiday season
- Lifeguards hired for the summer and drivers hired for winter snow plow
A seasonal worker is one who is employed less than four months, or 120 days of work, during the calendar year.
Examples of seasonal workers:
- Rotating cashiers hired between Memorial Day and Labor Day for a food truck
Why is it important to know the difference?
Misclassifying a seasonal worker as a seasonal employee could result in significant penalties for you as the employer.
Seasonal workers are relevant for determining if you are an Applicable Large Employer (ALE) as Employers who are ALEs must comply with the Play or Pay Mandate. For the seasonal worker exception to apply an employer must satisfy two requirements, according to the ACA:
- The employer must not be in excess of 50 full-time employees (including FTEs) for more than 120 days, or four months, in the preceding calendar year.
- The employees employed during the period that is no more than 120 days who cause the employer to exceed 50 full-time employees (including FTEs) must be seasonal workers.
2. Ensure compliance for salary and insurance
According to a survey by online insurance company Insureon, more than a third of business owners don’t have plans to update their workers’ compensation insurance to account for temporary workers. This could potentially result in fines, depending on which state your business is in.
Seasonal employees are entitled to your company’s workers compensation, which means they are provided medical care and payments for temporary and permanent disability. That means you must comply with your state’s workers compensation laws as well as coverage of injuries occurring in the workplace.
Other things you should be aware of about seasonal employees:
- They must be paid minimum wage, according to the Fair Labor Standards Act (FLSA).
- They are subject to the same tax withholding rules that apply to full-time employees.
- They need to fill out a Form W-4 as employers will still withhold the federal income tax calculated based on the personal and financial information provided.
Ensuring compliance can be time consuming. Having HR software can alleviate stress by ensuring that you comply with regulations and keeping you updated with any compliance changes.
3. Use an applicant tracking system
When potential employees apply for jobs online, all their information is uploaded into a database. Their contact information, resume and cover letter is then transferred from one component of the system to another as they move on in the hiring process.
Automate your recruiting tasks through a centralized tracking system (Source)
Applicant tracking systems provide a way to automate the entire recruiting process from processing job applications to sending automated emails letting applicants know their applications have been received. These systems streamline the recruiting process for employers, making your job of hiring seasonal workers quicker and more efficient.
4. Plan your onboarding and training
Onboarding: Once your candidates are hired, you’ll want to have a robust onboarding plan ready. Doing so sets clear expectations between your managers and seasonal employees and ensures a great onboarding experience.
Provide your managers with a checklist of what they must do around new hire forms and orientation. Onboarding software can help with that, by providing customized workflows for work eligibility and tax documents.
Training: It’s important to set your seasonal employees up for success, as you need them to be just as capable as your full-time employees—especially for the busy season.
When it comes to training, do not underestimate its importance for seasonal employees. Expecting them to perform at the same level as your full-time employees without adequate training will yield unsatisfactory results.
Give them the knowledge they need to do a job well. Train them on processes and duties by using language they understand as new team members and incorporating clear and engaging content.
When it comes to hiring seasonal employees, it’s important to get a head start as you’re not going to be the only one looking for seasonal employees.
You’ll see that each of the steps above involves researching and ensuring compliance, as well as organizing onboarding and training–all of which can be streamlined and automated by HR and applicant tracking system software.
To learn more about how HR and applicant tracking systems software can help you with your hiring, onboarding and training, check out our online HR software Buyers Guide and applicant tracking systems Buyers Guide.