Start the holiday off right by following best practices for the seasonal hiring of temporary employees
The year-end holidays require many businesses to temporarily increase their staff. If you need to hire seasonal workers, here are 7 tips to help you avoid the post-holiday litigation blues.
- Be specific about the time frame
Although seasonal employees should understand that holiday jobs are temporary, it is still advisable to reiterate this and even put it in writing. You should also explain that they are at-will employees. This means you have the legal right to terminate them with or without cause prior to or at the end of the designated employment time frame.
- Conduct an unbiased interview
Know what questions you can and cannot legally ask during the interview or on your application form. It is of course against the law to refuse to hire someone just because of age. And, the last thing you want is a protracted discrimination lawsuit that extends to the following holiday season.
- Verify eligibility
Just as you are legally obligated to do for permanent employees, you should require holiday staff to complete Form I-9 as proof of eligibility to work in the U.S. A free, web-based program provided by the U.S. government called E-Verify is an additional way to protect your business. Participation in E-Verify is voluntary for most employers. E-Verify compares information from the I-9 to data in government records. If the information matches, then the candidate’s eligibility to work in the United States is automatically confirmed.
- Consider using a non-disclosure agreement
As you would with any employee, give thought to restricting access to confidential information. If any seasonal employees must have access to confidential or proprietary information about your company, make them review and sign a non-disclosure/confidentiality agreement before the start of employment.
- Know the wages and taxes required by law
Employers who do not typically hire seasonal personnel may not be aware that all state and federal wage and hour laws must be followed during the holiday season. While it is not illegal to pay wages to employees in cash, it is not a generally accepted business practice. Unfortunately, some businesses use cash to pay employees in an attempt to avoid paying payroll taxes. Employers must withhold payroll taxes (federal and state income tax along with FICA – Social Security/Medicare – tax) from employees’ pay. Employers must also report and pay these payroll taxes to the IRS, including both the employee and the employer portion of FICA taxes.
- Know the difference between an employee and independent contractor
Laws covering harassment, discrimination and workplace health and safety apply equally to all workers, including your holiday staff. However, some laws differ when it comes to hiring independent contractors. These are essentially self-employed individuals who often seek seasonal or part-time work. They are usually very experienced in certain fields and work largely unsupervised.
If you classify a worker as an independent contractor, the individual is not entitled to employee rights under the Wages and the Fair Labor Standards Act (FLSA), including the right to minimum wage, anti-discrimination protections, workers compensation and overtime pay. Employers do not pay payroll taxes for independent contractors. The contractor is responsible for paying taxes to both the Internal Revenue Service and the state.
- Include training on company policies
To protect yourself from discrimination and other lawsuits, it is advisable to train seasonal employees on your company policies regarding sexual harassment and discrimination and have a process in place to respond to any complaints of retaliation made by them.
If you need detailed guidance on any legal obligation pertaining to seasonal hiring, consult with an attorney who practices labor and employment law.
Murray Feldman has over 30 years of legal experience with defending workers’ compensation claims for employers, insurance carriers and third party administrators. He is an appointed Special Assistant Attorney General for the State of Michigan (1995-present) and serves as an Ad Hoc Hearing Referee for the Michigan Civil Rights Commission (1998-present).