By: Naomi Gemmell, Esq.
With the holiday season approaching, seasonal workers are in high demand. For many businesses, the holiday shopping season can define a company’s bottom line for the entire year. Target alone will hire 130,000 seasonal workers this holiday season, Kohl’s plans to hire 90,000 seasonal workers, and UPS is expected to hire an additional 100,000 workers. While seasonal work can provide employers with needed support, this sudden increase in hiring temporary workers also brings with it some major risks. There are many laws and regulations that employers should be aware of before hiring seasonal workers.
Opportunity to Work
California businesses should confirm whether they need to first offer additional hours to current workers. On April 1, 2017, San Jose’s Opportunity to Work Ordinance made it mandatory for businesses with at least 36 employees to offer more hours to current workers before hiring additional staff or contracting with staffing agencies. San Francisco also requires chain restaurants and stores to offer qualified workers extra hours before hiring seasonal employees. While this type of rule has not yet been made into state-wide law, employers should be on the look-out for ordinances in their own cities.
Classifying Seasonal Workers
Employers must ensure that seasonal workers are correctly classified for tax-reporting purposes, even if they are hired through a staffing agency. Seasonal workers should generally be categorized as employees of the employer or staffing agency, rather than independent contractors, and should receive W-2 tax forms. Under California Assembly Bill 1897, employers that hire workers from staffing agencies are automatically liable for wages and workers’ compensation violations by the staffing agencies.
Smaller businesses should consider whether hiring seasonal workers turns them into a large employer for legal purposes. For example, there are several jurisdictions in California that use a two-tier minimum wage system based on whether an employee has 26 or more, or 25 or fewer, employees. Further, two provisions of the Affordable Care Act apply only to employers with 50-full time employees, and hiring seasonal workers beyond a limited period of time could impact coverage, reporting, and tax requirements.
If you have any questions regarding employment laws or these employment law updates, please contact Naomi Gemmell. Naomi is an Associate in the firm’s Employment and Litigation Practice Groups. Naomi is based in Leech Tishman’s El Segundo, CA office and can be reached at 424.738.4400 or firstname.lastname@example.org.
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Leech Tishman Fuscaldo & Lampl is a full-service law firm dedicated to assisting individuals, businesses, and institutions. Leech Tishman offers legal services in alternative dispute resolution, aviation & aerospace, bankruptcy & creditors’ rights, construction, corporate, employee benefits, employment, energy, environmental, estates & trusts, family law, government relations, immigration, insurance coverage & corporate risk mitigation, intellectual property, internal investigations, international legal matters, litigation, real estate, and taxation. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in El Segundo, CA, Chicago, Los Angeles, New York, Sarasota and Wilmington, DE.