Hiring seasonal workers can raise some important legal questions over how to properly handle overtime pay, work schedules, employee training, and other matters.
These concerns particularly affect businesses in the hospitality and retail industries, which tend to hire seasonal workers in the fall to prepare for the winter holidays, or companies in the tourism and recreation industries, which are often busier during the summer months.
The good news is employers can take steps to avoid legal landmines to ensure their busy season will be merry and bright.
Hiring and Wage and Hour Compliance
For many businesses, the holiday season is a "make or break" period which can define their bottom lines for the entire year. Temporary and part-time employment spikes as retailers and other businesses increase staffing to accommodate their seasonal increase in business.
As with recruiting any employee, well-planned hiring practices that comply with applicable employment laws can help ensure that your company is prepared to defend any potential claims.
Preliminarily, it is important to properly classify seasonal workers as either employees or independent contractors. It can be tempting to classify these workers as independent contractors because they’re not subject to the Fair Labor Standards Act’s (FLSA) minimum wage or overtime requirements and are responsible for their own benefits and for paying both the employer and employee portions of Social Security and Medicare (FICA). This temptation to reduce costs can be particularly compelling when hiring seasonal employees.
But misclassifying seasonal workers as independent contractors can open the employer to significant liability under both federal and state laws. This can include significant fines, double or even treble damages for unpaid overtime, reputational harm, and, in some instances, even criminal charges.
Given this, businesses should conduct a thorough and job-specific classification analysis before designating seasonal workers as an independent contractor.
If the classification analysis determines that the seasonal worker should be classified as an employee, it is important to make sure that they are being paid correctly and that their employment complies with applicable wage-and-hour laws.
For instance, many seasonal workers are paid minimum wage. In 2024, 26 states, along with Washington, D.C. raised their minimum wage for 2024. These states are: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New York, Ohio, Oregon, Rhode Island, South Dakota, Vermont, Washington, and West Virginia. Moreover, many states increase their minimum wage effective on January 1st, which can overlap with the employment of seasonal employees hired during the holidays.
Businesses should also exercise caution before classifying seasonal employees as exempt from minimum wage and overtime under the FLSA. While some seasonal employees may satisfy the Act’s exemption requirements, a vast majority do not and should be paid hourly.
The FLSA, however, does provide some specific minimum wage and overtime exemptions for employees employed at seasonal amusement or recreation establishments. This exemption applies to any employee employed by an amusement or recreational establishment that does not operate for more than seven months in any calendar year, or, alternatively, earns a significant percentage of its overall income during a six-month period.
Certain states also have exemptions for seasonal employees, including employees of certain amusement parks, recreational establishments, and summer camps.
Many high school and college students experience an increase in their free time and their need for extra cash around the holidays. As many retailers have an increased need for seasonal help at that same time, employers may fill their seasonal and/or part-time positions with young workers. It is often a good fit for both parties.
However, there are additional issues associated with hiring minors that some employers may not be aware of. Many federal and state child labor laws regulate the maximum number of hours or days that a minor can work, the type of work being performed, and other matters. In fact, nearly every state has hours of work and occupational restrictions that apply to the employment of persons under 18. Many also have meal or rest period requirements.
Notably, Department of Labor (DOL) enforcement is increasing in this area. In 2023 it launched the National Strategic Enforcement Initiative on Child Labor in part to look for more creative ways to increase investigations into, and the penalties on, employers that violate child labor laws. Employers employing minors or preparing to hire minors for seasonal jobs may want to:
(i) review the maximum hours and time-of-day restrictions applicable to minors fourteen and fifteen years of age;
(ii) ensure that the jobs or tasks to be assigned to minors do not fall into one of the “hazardous” occupations or tasks (additional restrictions apply to minors fourteen and fifteen years of age);
(iii) confirm they are keeping accurate records of minor employees’ dates of birth in accordance with federal regulations;
(iv) check related state requirements in states where they have employees to determine whether there are additional maximum hour and time-of-day restrictions, recordkeeping requirements, or hazardous occupations that may apply; and
(v) conduct audits of existing child labor compliance.
Highlighting timekeeping practices and corporate policies during onboarding may help to prevent future legal hassles.
Discrimination
Many state and federal laws apply to seasonal workers the same way they do to full-time, year-round employees. For example, the federal Civil Rights Act of 1964, Age Discrimination in Employment Act of 1967, Americans with Disabilities Act of 1990, Pregnant Workers Fairness Act, and PUMP for Nursing Mothers Act all generally apply to most seasonal workers.
The Family and Medical Leave Act, on the other hand, does not specifically exclude seasonal workers but requires that an employee have worked for their employer at least 12 months (nonconsecutively), worked at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles before they are eligible for leave. Many seasonal employees cannot meet these requirements.
Some states, however, including Connecticut, Massachusetts, Oregon, and Washington, have family medical or sick leave laws with significantly lower eligibility requirements that could apply to seasonal workers. Given this, it is important for businesses hiring seasonal workers to become familiar with all local leave laws, as well as any state-specific antidiscrimination laws, in the states where they operate.
Notably, the EEOC has recently filed lawsuits on behalf of seasonal workers, noting the need to combat discrimination in all aspects and types of employment. These suits include an ADEA class action against a theme park that implemented a policy prohibiting most seasonal employees aged 30 and older from living in employee housing, as well as a sexual harassment lawsuit on behalf of a seasonal agricultural employee who was harassed and, ultimately, physically assaulted by another seasonal worker.
To avoid these issues, employers should consider giving seasonal workers the same antidiscrimination, harassment, and compliance training given to their year-round employees. At a minimum, seasonal employees should receive a copy of the employee handbook or any written policies regarding harassment, retaliation, workplace conduct, and dress code during the onboarding process.
Other Legal Considerations
Below are some additional considerations that businesses should take into account when hiring seasonal employees.
- Many employers may choose to contract with employment or staffing agencies to provide their seasonal workforce. But this does not necessarily excuse compliance with the laws described above. Nearly all federal and state employment laws have a joint-employer test. If the test is met, a court or the applicable administrative agency will find that the employee is employed by two (or more) employers such that the employers are responsible, both individually and jointly, to the employee for compliance with the relevant statute.
- Federal and state workplace safety laws all generally apply to seasonal workers.
- Employers are not required to provide the same benefits to seasonal workers they give to full-time, year-round employees. However, the federal Affordable Care Act may require an employer to provide health insurance to a seasonal employee who works thirty hours or more per week or 130 hours or more in a month.
- Employers may also want to train seasonal workers on timekeeping practices to ensure legal compliance, especially with regard to wages, overtime, and meal breaks. In addition, employers may want to clarify in their training materials any state and local paid leave laws that apply to seasonal workers.
- Employers that provide a written application or offer letter may wish to indicate that the seasonal job is at-will, temporary, and subject to the state laws where the work is performed. The application or offer letter can state the wage rate and a job description. It does not have to promise or guarantee a certain duration or end date of employment.
- Small employers may want to stay mindful of how seasonal hires affect their total workforce size because certain state and federal laws become applicable once an employer reaches a certain number of employees, even if some of those employees are seasonal or temporary.
- The federal Migrant and Seasonal Agricultural Worker Protection Act (MSPA) protects migrant and seasonal agricultural workers by establishing employment standards related to wages, housing, transportation, disclosures and recordkeeping. Employers who hire migrant and seasonal agricultural workers should we well-versed in the MSPA’s requirements.
For more information, please contact:
Ryan H. Crosner, ryan.crosner@ogletreedeakins.com
Harry M. Rowland, III, harry.rowland@ogletreedeakins.com
