Nearly 600,000 people will take on holiday seasonal jobs this year, predicts the National Retail Federation (NRF). The usual pressure to bring them in the door, compounded by today’s low unemployment environment, could be a recipe for trouble. So, it’s important to take the time to properly vet seasonal workers, just as you would your permanent employees.

Avoiding Potential Pitfalls

About one-quarter of prospective seasonal workers whose references were checked were deemed by their previous employers as unlikely to be rehired due to performance issues, according to an informal poll of clients by a background check service provider. And 4% were flagged for suspected fraudulent activity.

Another grim statistic from the National Retail Security Survey is that about one-third of inventory theft is carried out by employees — and that risk increases during the holiday season. Possible reasons include:

• Supervisors are busier than normal and more apt to fail to observe the behavior.
Increases in customer traffic make it harder for security personnel to spot theft even when they’re on alert.

• The sense of urgency felt by many financially stressed employees (temporary and otherwise) may create a motive for them to steal during the holiday season.

• Seasonal workers are typically less loyal to temporary employers, allowing them to rationalize dishonest behavior.

How can you minimize the risk of theft by temporary workers? Don’t skimp on hiring due diligence. The fact that an employee will only be working for you for a short period isn’t a good reason to neglect obtaining criminal background checks and seeking references from previous employers. Even when those steps don’t raise any red flags, the seasonal workers you hire get the message that you take employee quality control seriously.

Avoid the temptation to lower your hiring standards when you’re hiring workers to fill crunch-time gaps. Even if you’re not worried about employee theft, the quality of customer service provided by all workers — both permanent and seasonal — is an important part of serving your customers and building your business reputation.

Finding Qualified Seasonal Help

To help recruit the best seasonal workers, the first step is to consider candidates right under your own nose: your permanent hourly staff. Some might welcome the opportunity to put in some extra hours over the holiday season. Granted, you’ll probably wind up paying overtime rates, but that could still prove to be a bargain when you consider the challenge of finding people who can hit the ground running.

Next, ask permanent employees for referrals, including members of their own families. Consider offering them a “finder’s fee.” For the sake of their own reputations, employees won’t want to refer anyone with whom they lack confidence.

Also check your HR database for former interns and employees, whether seasonal or permanent, for potential candidates. Don’t overlook retirees who might be interested in returning to their old jobs temporarily.

Managing Expectations

Let’s suppose no “bad apples” make it past your vetting process. Keeping seasonal workers on track requires you to consider their personal needs and to manage their expectations. It’s essential to clearly communicate the expected duration of their assignment — so they’re not counting on long-term employment.

Complying with Employment Laws and Regulations

For tax and legal purposes, remember that seasonal workers are employees, not independent contractors. If you consider treating any seasonal employees as independent contractors, be sure the nature of the work they perform and the manner that it’s performed will satisfy IRS standards for that status.

Seasonal employees are entitled to most, but not all, of the rights and privileges of your permanent staff. They’re covered by the Fair Labor Standards Act (FLSA) and the various anti-discrimination laws under the U.S. Civil Rights Act. You may also be governed by local laws, such any minimum wage rules that are more stringent than the federal standard.

The FLSA doesn’t require overtime pay for work on holidays. However, you might find it advantageous from a practical standpoint to pay seasonal and permanent employees extra for working on such holidays as Thanksgiving, Christmas and New Year’s Day.

Seasonal employees generally won’t be eligible for the same employee benefits, including paid vacation and unpaid leave under the Family and Medical Leave Act (FMLA), as permanent ones. The FMLA requires you to provide that benefit only to employees who have been on your payroll for at least a year and worked at least 1,250 hours over that 12-month period. However, local laws might be more generous.

When deciding how much to pay and what non-mandatory perks to offer seasonal workers, take the long view, if possible. If seasonal workers feel like valued members of your team, they’re more likely to work hard and possibly become strong candidates for a permanent position in the future. Or, if seasonal workers just want extra money during the holidays or school breaks, they’re more likely to return to work during your next seasonal crunch period.

Sticking to Your Guns

Unemployment levels are at historical lows, making it difficult to find qualified workers for permanent positions. Seasonal peaks only compound the hiring challenges facing your HR department. But avoid the temptation to cut corners when vetting or compensating your seasonal staff. By maintaining high-quality HR practices for all workers, your company will enjoy a prosperous busy season and set the stage for success in 2020.

Fill out the form below for more information.

© Copyright 2020 Thomson Reuters. 

Disclaimer of Liability
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability and fitness for a particular purpose.