With summer here, many family businesses may be considering bringing on seasonal labor to help satisfy the increased work load they face during this time of year. This article contains various concerns to keep in mind when going about that process.

Most Laws Still Apply

While there are notable nuances and distinctions between seasonal and standard labor, it is important to remember that, by and large, the same laws that dictate how employers interact with their regular employees apply to seasonal laborers as well.

Employee or Independent Contractor?

When a business is hiring someone to work for them for only a short time, it is important to carefully think through whether that worker will be an employee or independent contractor. While a business might prefer one status over another, it is important to remember that there are legal standards that apply to determine whether it is appropriate to classify someone as an independent contractor.

Because a business is required to withhold income taxes, pay an unemployment tax, and withhold and pay Social Security and Medicare taxes on wages paid to employees but not for independent contractors, the Internal Revenue Service has specific rules for the proper classification of workers. One primary distinction is the degree of control the business may exercise over the worker and how he or she performs the work. Because of the risk of liability for the failure to withhold taxes and other matters, if a business intends to classify a worker as an independent contractor, we encourage consultation with legal counsel.

Hiring Minors

While the increased workload that leads a business to hire seasonal labor may make it appealing to hire any person who is willing to work, businesses should remember that there are restrictions on who they can hire and what duties they can assign to certain employees. As a general rule, minors are restricted in the types of work they can do and the hours they are permitted to work.

However, certain exceptions to these restrictions are afforded to family businesses, and to family businesses in the agricultural industry in particular. In Washington, family owned farms may, with restrictions, employ children under the age of 12; an age group that is otherwise prohibited from working. Depending on the nature of the work, child labor rules may also apply.

For more information on child labor restrictions in Washington, visit the Labor & Industries webpage on hiring minors.

Overtime

A large portion of seasonal workers are entitled to overtime pay. This means that they must be paid one- and one-half times their regular hourly rate for each hour they work in excess of the 40-hour work week (or for work in excess of eight hours in a day in California and some other states). However, the agricultural industry is once again afforded an exemption. Most agricultural workers, seasonal or otherwise, do not qualify for overtime pay.

Health Insurance

Although employers generally prefer to exclude seasonal workers from group insurance benefits, businesses that employ 50 or more full-time equivalent employees must keep in mind the requirements of the Affordable Care Act’s (ACA) employer mandate. Under the ACA, a worker is seasonal if the expected duration of employment is six months or fewer, and if the job typically starts and ends at the same time each year.

Generally, if an employer uses the monthly measurement method to determine full-time employees, the employer must offer coverage to any seasonal workers who work at least 30 hours per week, subject to any applicable waiting period (up to 90 days). If properly classified as seasonal, however, an employer using the look-back measurement method may subject the worker to an initial measurement period (between three and 12 months long). During this measurement period, the seasonal worker is not treated as a full-time employee and an employer may exclude the worker from health insurance, even if the worker is working 30 or more hours per week during the season.

Next Steps

While this article has explored many of the generalities of seasonal labor, to ensure compliance, as well as the best business outcome, be sure to consult legal counsel about the particularities of your situation.

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