How Seasonal Employees Affect Payroll

Hiring seasonal employees can be an excellent idea for any business. It can help fill in the gaps during a slower time of year and help business owners cut costly hours from their payroll while focusing on more profitable seasons. Seasonal employees can also be excellent additions to a business when trying to comply with labor laws and provide health benefits while minimizing costs. 

Hiring these short-term employees is not without its risks, though. Some employers may need to make changes to their payroll to accommodate the fluctuations in staff during certain times of the year. For example, if you employ seasonal workers during your slow seasons, this can inflate your employee count, which might mean you will have to start paying quarterly taxes instead of monthly. Let’ take a closer look at how seasonal employees can affect your Daytona Beach business’s payroll. 

Seasonal Employees and Federal Laws 

In short, seasonal employees are temporary workers that you bring in only during parts of the year. You may hire them to help with the holiday rush, such as online sales, or if you operate a seasonal business such as a summer camp or ski resort. The most significant benefit to hiring seasonal employees is that you no longer have to continue to pay extra employees once the rush or holiday season has ended. 

According to the Fair Labor Standards Act, seasonal employees have the same rights as full-time and part-time employees. This means that seasonal workers must receive hourly pay of at least minimum wage. You must also compensate them for their overtime work; even though seasonal workers may only be with your business for a short period, you still need to establish a regular pay period with them, whether that be weekly, bi-weekly or monthly. 

Withholdings such as taxes must also be made before paying your seasonal employees. Depending on how frequently your business is open throughout the year, this will determine when you will have to send in your tax forms. 

Effects on Payroll 

Since seasonal employees have the same rights as full and part-time employees, you must make sure that you include them in your payroll management. Failure to include these short-term hires on your payroll could get you into trouble with the IRS when tax season comes.

It makes sense that many business owners would rather pay their seasonal workers under the table, meaning paying them secretly. Even though this might seem like an easy solution to the added paperwork, it’s just another way that the IRS could fine you with potential penalties. In the end, it is not worth the headache and fines from the IRS.  

If you are looking to hire new short-term employees for the holidays or high-demand seasons, it may be best to look into seasonal employees. At Vision HR, we are here to help you with all of your payroll needs, especially when adding seasonal employees to your payroll management. Give us a call today and see how our exceptional services can help your business.