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I’m a Seasonal Business. Do I Still Need Workers’ Comp?

March 9, 2023 | posted by Abacus Payroll

Whether seasonal, temporary, or permanent, all workers always have a right to a safe and healthy workplace. Likewise, employers should not assume that short-term employees do not need worker’s compensation insurance (workers’ comp) coverage. That can be a very costly mistake.

So the question becomes, do businesses that rely on seasonal employees still need workers’ comp? Coverage requirements for private companies depend on the state but, in most cases, the answer is yes.  Workers are considered seasonal if they are typically hired for less than six months and their employment begins and ends around the same time each year. This includes Jersey Shore, beach, and summer tourism employees, agriculture farm workers, substitute teachers, holiday retail help, and more.

The conditions for workers’ compensation requirements, exceptions, policy benefits, and penalties for lack of coverage all vary from state to state. Some states, like Florida, have a minimum number of employees needed and coverage is even impacted by industry, size, and employee types. It cannot be stated enough that, as an employer, you should turn to your state for its specific regulations.

New Jersey Workers’ Compensation Insurance

Even though your New Jersey workforce size may vary in a given quarter of the year, if you have full or part-time employees working for you, your business should have workers’ comp coverage. This includes corporations, partnerships, LLCs, and sole proprietorships (if more than just the principal owner). According to, even out-of-state employers may need Workers’ Compensation coverage if a contract of employment is entered into in New Jersey or if work is performed in New Jersey.

Who is exempt from Workers’ Comp in New Jersey?

  • Unpaid interns or volunteers
  • Independent contractors
  • Sole proprietors with no employees

Workers’ Comp Requirements in Nearby States

Most states require workers’ comp coverage for all full-time and part-time employees.  However, even if workers’ comp is required within the state, states have varied exemptions that multi-state and seasonal businesses may need to be aware of.

Who is exempt from Workers’ Comp in Pennsylvania?

  • Agricultural employees who work fewer than 30 days or earn less than $1,200 in a calendar year from one sole employer
  • Workers who have coverage under other workers’ compensation acts, such as railroad workers, longshoremen and federal employees
  • Employees who are exempt due to religious beliefs

Who is exempt from Workers’ Comp in Delaware?

  • Agriculture farm workers
  • Independent contractors

Who is exempt from Workers’ Comp in New York?

  • Sole proprietors
  • Partnerships with no employees
  • A one- or two-person owned company with no employees
  • Excluded non-profits may include religious, clergy, amateur athletics, non-profit education, some non-profit volunteers, and compensated executive officers of a non-profit r unincorporated association

New York state specifically states that all for-profit businesses and most non-profits must carry workers’ comp, including businesses that have full- and part-time employees who are temporary, seasonal, casual, leased, borrowed, and unpaid.

(Source: The Hartford)

Are there penalties if I don’t have Worker’s Comp?

Yes, if you are required by your state law or OSHA to carry Workers’ Compensation, penalties and fines can be imposed. Keep in mind that workers’ comp penalties aren’t often for refusing to obtain and pay for coverage, but in most cases, it’s due to the employer misclassifying employees. This is why it’s important to understand employee and contractor classifications and to work with trusted professionals who can give you accurate guidance.

In the state of New Jersey, employers found guilty of not carrying adequate workers’ comp may face up to $5,000 in fines for each 10-day period without coverage and possible criminal charges. And note — these penalties are not dischargeable in event of bankruptcy. Other states could be up to $10,000 or more in fines.

Pay As You Go Workers’ Comp

Cash flow consistency is often the biggest challenge of  a seasonal business. One alternative that helps free up cash flow is pay as you go workers’ comp, which may require an initial deposit and then monthly payments based on your monthly payroll. This could be beneficial with a fluctuating workforce. 

Turn to a professional payroll specialist to make sure you are being compliant and making strategic decisions that help run your business better. Request a quote today or give Abacus a call at 856-667-6225.


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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.