Seasonal Hiring: Comply With the Law and Stay Out of Court
With seasonal hiring in full swing, now is a good time to review your policies to ensure compliance.
By Christine Samsel and Nancy Strelau
It's summer and hordes of young workers are taking temporary jobs to earn money or gain experience. This will be followed all too quickly by the holiday shopping season. In both instances, employers must tread carefully; seasonal employees, particularly teenagers, pose special risks.
Harassment and Other Risks
Seasonal workers often are neglected with respect to training on employment policies. Employers should ensure that these workers receive all appropriate training, particularly with respect to harassment policies and complaint procedures.
Young workers are especially vulnerable to harassment because of their relative inexperience in the workforce. They often view adults as authority figures to be obeyed; unscrupulous individuals can prey on this inexperience and trust. Young workers may be more inclined to tolerate inappropriate behavior and less likely to understand the right ways to challenge such behavior.
Conversely, young workers may need to be reminded that there are more formal standards of behavior in the workplace than there are on campus or socializing with their friends. The difficulties are compounded in industries where supervisors themselves may be relatively young and inexperienced, such as retail, restaurant and hospitality. Issues particular to young adults should be emphasized in management training.
Failure to heed these warnings can be devastating to employers and individual employees. Costly civil actions may be brought by affected employees, the Equal Employment Opportunity Commission or state agencies, and may result in criminal charges against individual employees. For instance, a Texas jury recently awarded a young female former employee of a chain restaurant nearly $8 million for sexual harassment she claimed to have suffered as a 16-year-old by her 26-year-old manager, and she is now pursuing criminal charges against the manager. (See Youth@Work, www.eeoc.gov/youth, for additional examples.)
Employers also must be cognizant of legal restrictions on young workers duties, number of hours permitted and timing of shifts, particularly during the school year.
Many employers erroneously believe their unpaid internship/training programs are lawful, and lawsuits on this issue continue to proliferate. The U.S. Dept. of Labor has identified six criteria that must be satisfied to determine whether an intern need not be paid. See DOL Fact Sheet #71, https://www.dol.gov/whd/regs/compliance/whdfs71.pdf. Many states have guidelines that layer on top of these. The analysis is very fact-specific, and employers should consult legal counsel before implementing an unpaid internship program.
Employers often dont want to provide benefits to part-time, seasonal or temporary employees. However, absent thoughtful plan design, these employees likely are eligible to participate.
Tax-Qualified Plans. Retirement plans cannot use conditions "relating to age or service" to delay participation beyond age 21 or completion of one year of service (i.e., 1,000 hours/12-month period) (or, in limited cases, two years of service), but may exclude employees using reasonable classifications based on job or other non-service-related conditions. A classification will be reasonable if it's based on "objective business criteria," such as "specified job categories, nature of compensation (i.e., salaried or hourly), geographic location, and similar bona fide business criteria." 26 C.F.R. §1.410(b)-4(b). Thus, a plan cannot wholesale exclude part-time or seasonal employees. But, for instance, a law firm's 401(k) plan could exclude the job category "summer associates."
A plan could impose differing eligibility criteria for regular workers (e.g., the first of the month following hire date), and for part-time/seasonal employees (e.g., one year of service), provided the design satisfies nondiscrimination requirements. This prevents coverage of employees hired for one summer, but likely only delays plan entry of employees hired for successive summers.
Group Health Plans. If the employer's group health plan is subject to the Affordable Care Act and the employee is expected to regularly work more than 30 hours per week or 130 hours/month -- even for a limited time -- the employee must be offered coverage after a 90-day waiting period (or shorter). Offering coverage may be the easy path, as summer employees often have other coverage (such as college or parents). But employment practices could be utilized to avoid having to offer coverage, such as limiting employment to 89 days with no rehire for at least 13 weeks, legitimate seasonal employment, or imposing non-time-based eligibility conditions, among others.
Christine Samsel, a shareholder at Brownstein Hyatt Farber Schreck, is a highly respected labor and employment attorney with a comprehensive, coast-to-coast practice. She advises employers on virtually every aspect of employment law, from advice and counseling, training and contract negotiation to litigation. Nancy Strelau, a shareholder at Brownstein Hyatt Farber Schreck, focuses on employee benefits, executive compensation and ERISA litigation. Her experience encompasses the full range of employee benefits. For more information, visit www.bhfs.com.