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Paying Seasonal Employees – Where Do I Begin?

When your business is overwhelmed, unable to keep up with the workload and provide adequate service, it’s probably time to bring on another employee. But sometimes, the surge in business is only temporary. Or your business only runs for part of the year.

Either way, this is where seasonal employees come in to play.

Businesses in a vast array of industries use seasonal workers at different times of the year. Construction companies and landscapers bring on spring and summer workers. Retail stores bring on Christmas staff. Tax companies bring on people during tax season.

For those who have never brought on a temporary worker, you might not be sure how to handle them. Are they actually an employee? Or are they something else entirely?

The truth is, it depends.

Employee or Contractor?

While full-time workers should generally be official employees of your company, part-time help may or may not be. Many businesses hire on seasonal employees as actual employees of the company. That means they are subject to the same withholdings and protected under the same laws as your year-round employees in accordance with the Fair Labor Standards Act.

While they’re treated as regular employees, they’re not necessarily counted as actual employees. Any worker who works less than 120 days a year does not count towards whether your business is considered large (50+ employees) or small (less than 50).

On the other hand, you can hire seasonal help as Independent contractors. That means you aren’t required to pay taxes and fees for them, but you’re also limited in the control you have over them. For example, you technically can’t dictate when an independent contractor works, where they work, or how they dress at work.

As with full-time workers, trying to pay a seasonal employee as an independent contractor when they should be an actual employee can get you into trouble with the IRS.

Exemptions for Seasonal Employees

Depending on the type of business you run, the number of hours an employee works, and the state you live in, certain exemptions may exist regarding seasonal employee wages, benefits, unemployment, and more. It’s best to consult an accounting professional directly to figure out the specifics of your situation.

Frequency of Payment

Your seasonal employees should be paid the same frequency as your other employees. That frequency varies state to state. With a proper payroll system in place, you should be able to add and remove seasonal employees as needed, accounting for their cost while making the necessary deductions.

Let Us Handle the Details

Managing payroll can be confusing, stressful, and time-consuming if you’re not sure what you’re doing. Payroll errors are a costly mistake for businesses every year.

The simplest way for small to medium size businesses to deliver timely, accurate payments with proper records is to let a team of professionals take care of it for you. At LWS, we provide flexible, affordable payroll services to Springfield, Ohio, and beyond.

Whether you’re paying full-time employees, seasonal help, independent contractors, or all of the above, we’ve got you covered. Contact us today!

Posted by admin | in Accounting, Payroll