Editorial · November 19, 2017
Seasonal Employee Rules: Hiring for the Holiday Rush
Seasonal employee rules are the same pay and paperwork rules you use for any worker, and they apply from the first shift. If you hire extra hands for the holiday rush, plan to pay at least the federal minimum wage, pay overtime after 40 hours in a week, and finish the hiring forms. This checklist covers the basics as of November 19, 2017.
Pay the minimum wage from day one
The Fair Labor Standards Act (FLSA) is the federal law that sets minimum wage, overtime, recordkeeping and youth employment standards. The Department of Labor says the federal minimum wage for covered workers is not less than $7.25 per hour, in effect since July 24, 2009.
A short job is not an exception. A holiday hire who works three weeks is paid on the same terms as a year-round worker. The Department of Labor says most businesses with at least $500,000 in yearly sales are covered. Workers can also be covered one by one if their work crosses state lines, such as making calls to people in other states or handling records of interstate transactions.
Check your state too. State or local law can set a higher minimum wage than the federal rate. Where it does, the higher standard is the one that applies.
Count hours and pay overtime
With only some exceptions, overtime must be paid at one and one-half times a worker's regular rate for each hour over 40 in a workweek. Holiday weeks are when this rule bites. A seasonal worker who covers extra shifts in the last two weeks of December can cross 40 hours quickly.
The same fact sheet says deductions for cash shortages, required uniforms or customers who leave without paying are not allowed if they push pay below the minimum wage or cut into overtime pay. Wages are due on the regular payday for the pay period.
Keep a time record for every seasonal worker. The FLSA includes recordkeeping standards, and a clear record is also your best answer if a pay question comes up later.
Know the limits for young workers
Seasonal jobs often go to students, so the youth rules matter. The Department of Labor says workers aged 14 and 15 may work outside school hours in non-hazardous jobs under set limits: a cap of 3 hours on a school day, 18 hours in a school week, 8 hours on a non-school day, or 40 hours in a non-school week. Work may not start before 7 a.m. or end after 7 p.m., except from June 1 through Labor Day, when evening hours extend to 9 p.m.
Workers aged 16 and 17 may do any non-hazardous job for unlimited hours. Anyone under 18 may not run certain power-driven machines, and generally may not drive on public roads as part of the job.
There is also a youth minimum wage of $4.25 an hour. It may be paid only to workers under 20, and only during the first 90 consecutive calendar days of employment. The law bars employers from displacing another worker to use it. Where state or local law sets a higher minimum with no exception for youth, the higher standard applies. Because most holiday jobs are short, many employers simply pay the full minimum.
Complete Form I-9 for every new hire
U.S. Citizenship and Immigration Services (USCIS) says all U.S. employers must make sure Form I-9 is completed for each person they hire. This includes citizens and noncitizens, and it includes seasonal and part-time staff. Both the employee and the employer complete the form.
The employee states that he or she may work in the United States and shows documents that prove identity and work eligibility. The employer must look at the documents, decide whether they reasonably look genuine and belong to that employee, and record the document details on the form. The list of acceptable documents is on the last page of the form. At the time of writing, the edition date on the USCIS page is 07/17/2017.
Do not send the form to USCIS or to Immigration and Customs Enforcement. Keep it. USCIS says the employer must retain each form for three years after the date of hire, or for one year after employment ends, whichever is later. Officials from the Departments of Homeland Security, Labor or Justice may ask to inspect it.
Collect Form W-4 and report the new hire
The IRS tells employers to ask all new employees for a signed Form W-4, Employee's Withholding Allowance Certificate, when they start work, and to make it effective with the first wage payment. If a new employee does not hand you a completed form, the IRS says to withhold income tax as if the worker is single with no withholding allowances.
The IRS also says to record each new employee's name and Social Security number from the Social Security card. Employers must report new employees to a designated state new hire registry. A person you rehire counts as new if the person was separated from your payroll for at least 60 consecutive days. Many states accept a copy of Form W-4 with the employer's details added. Check your own state's registry for its method and deadline.
A short holiday hiring checklist
- Confirm the federal and state minimum wage before you post the job.
- Tell each worker the pay rate, pay day and expected hours in writing.
- Track every hour and plan for overtime in the busiest weeks.
- Check age limits before you schedule any worker under 18.
- Complete Form I-9 with each hire and keep it on file.
- Collect a signed Form W-4 and report the hire to your state registry.
This guide is general information, not legal advice. Rules can differ by state and by industry, so check with the Department of Labor, your state labor office or a qualified adviser for your own case.
Sources
- U.S. Department of Labor, Wage and Hour Division, Fact Sheet #14, revised July 2009, dol.gov.
- Fact Sheet #2, revised December 2016, dol.gov.
- Fact Sheet #32, Youth Minimum Wage, revised July 2008, dol.gov.
- U.S. Citizenship and Immigration Services, Form I-9 page, uscis.gov.
- IRS Publication 15 (Circular E), 2017, irs.gov.