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Payroll Tips for Hiring Temporary Workers

May 28, 2014 | posted by Abacus Payroll
temp workers

What to keep in mind when hiring temporary workers

Holidays and seasonal changes can affect your payroll size so make sure you stay on top of your employer duties year-round .

Just as retailers hire more help before the winter holidays, tourist attractions ramp up staff to prepare for the summer months, and farmers man their fields in time for harvest season, many small business industries have fluctuating payroll sizes throughout the year. However, it’s important to know that hiring temporary or seasonal staff members still calls for following many laws and regulations that come with hiring full-time employees.

Mandated by Law

Regardless of whether your new hire is seasonal or not, there are several benefits that must be provided:

  • Unemployment Benefits – Under federal law, it is up to the individual state to determine if a seasonal employee is eligible for unemployment benefits. You can refer to your state’s Labor Office to find out the exact eligibility qualifications.
  • Social Security and Medicare – A temporary or seasonal worker must still complete Form W-4 at the time of hire. Wages are subject to Social Security and Medicare tax.
  • Workers’ Compensation – Even though you don’t have the same workforce throughout the year, as an employer with employees you are still required to maintain Workers’ Compensation coverage.
  • Fair Labor Standards Act – Both part-time and full-time employees are subject to equal rights when it comes to minimum wage, overtime pay policies, child labor laws, and accurate recordkeeping responsibilities.
  • Labor Law Policies – As a small business owner, every employee at your organization is protected by labor laws to prevent harassment, discrimination, and to ensure proper workplace health and safety regulations are effectively in place.

Find out more about federal and state tax and labor law changes.

Not Required

Benefits not required are those typically reserved to full-time employees, such as retirement plans, health care coverage, insurance packages, paid time-off, and other various fringe benefits.  However, they can be considered solely at the employer’s discretion. If an employer was interested in turning to the Small Business Health Options Program (SHOP) Marketplace for health care coverage, keep in mind that seasonal employees who work fewer than 120 days per year are excluded from any calculations for the Marketplace under the Affordable Care Act.

Independent Contractors

Employers seeking additional help at different times of the year also have the option to hire an independent contractor. These contractors are typically specialized in certain fields and understand the temporary nature of their position to the company. They are hired by the employer, but not employed by them.  As such, they have their own set hours and business records, do not receive company benefits, and employment taxes are not withheld from their pay.  You are, however, required to report payments of $600 or more to the IRS.

Payroll Taxes

Even though seasonal or part-time hires are temporary for your organization, they are still subject to the same tax withholding rules that apply to the rest of your staff on payroll.  If they are classified as an employee, they will receive a W-2 Wage and Tax Statement.

As an employer, there are a few reasons why you may need to adjust the size of your workforce over various periods of time. Perhaps you are trying to control project costs by using part-time workers on an as needed basis. It’s also feasible to hire supporting part-time help to reduce the occurrence and burden of overtime with your full-time staff.  Any restaurant, shopping mall, amusement center, accounting firm, or farmer understands that high demand in one particular season or time frame requires more hands on deck. Whichever situation best fits your business’ needs, your payroll operations need to run smoothly throughout the year.

Contact Abacus Payroll at 866 667 6225 or by Email if you would like help with your payroll for seasonal staff.

See how Abacus Payroll helped Charlie Tomasello manage his seasonal hiring at his famous winery.


About the Author: Abacus Payroll

Abacus Payroll, Inc. is a leading provider of payroll solutions for businesses of all sizes. Whether yours is a family-owned small business or a national corporation, we provide payroll, tax and other financial services on time and at an affordable price. Unlike other payroll providers, Abacus Payroll will assign your very own payroll specialist who will understand your payroll needs inside and out. So no more speaking to a different person each time, no more sitting on hold for hours and most importantly no more missed deadlines! Contact us today to see how we can help your business. You can count on us.