The holidays: the time of year characterized by family, love, thankfulness and extravagant shopping sprees. Between Black Friday, Cyber Monday and the labyrinth of aisles dedicated to seasonal décor and gifts, it has become customary for stores and businesses to staff additional employees during the holidays. Hiring seasonal help, although not exclusive to winter months, has become a necessity for many businesses to survive the influx of increased business. However, there are some crucial things to note before posting up that “help wanted” sign.
Whether your hires are with you a couple weeks or a few months, it’s important to note that most laws and regulations that apply to year-round employees also apply to your seasonal hires. Workers’ comp, wage and hour laws, anti-discrimination rules and worker safety regulations all apply to any worker under your payroll.
Health Care — Affordable Care Act
When it comes to health care, things start to get more convoluted. Under the Affordable Care Act’s (ACA) employer mandate, any company with 50 or more full-time and full-time equivalent employees, as measured in the preceding year, is generally subject to the “employer shared responsibility provision.” Essentially, companies employing 50 or more full-time employees must provide at least 95% of eligible employees and their dependents with health insurance — or face a fee. While only full-time employees are required to have benefits, there is an exception that could apply to seasonal workers.
Worker versus Employee
Clarity can be found in the difference between a “seasonal worker” and a “seasonal employee.” A seasonal worker is someone who performs labor or services exclusively during holiday seasons. This mainly applies to retail stores in need of additional help for several weeks to lessen the burden of large crowds. Seasonal workers are still included as part of the headcount applicable to the ACA provision, although there are some exceptions available in certain cases.
A seasonal employee, on the other hand, is someone hired to work certain months out of the year (six months or less) and return to work for those “seasonal” months every year. Whether it’s stocking shelves over the winter holidays or manning the register at a busy summer store, these folks work those months each year without the need for rehire.
According to the IRS, an employee is considered full-time if they average at least 30 hours of work per week, or 130 hours of work per month. This means that many seasonal hires put businesses at the threshold for being subject to the ACA employer mandate.
It’s important to note that this merely scratches the surface. The regulations vary and specific stipulations could apply. If you have questions about the financial effects of the ACA employer mandate, feel free to contact us.