Hiring for the Holidays? Seasonal vs Part-Time Workers Decoded

Are you looking for extra help during the summer, tourist season, around the holidays, or just because business is booming? For most small to mid-sized business owners, this is a great “problem” to have. But that doesn’t mean that non-traditional hiring shouldn’t be approached with caution, knowledge, and care. 

For many employers, business is cyclical, and these busy seasons are “make or break” for bottom lines across the entire fiscal year. Offering seasonal and part-time work can be an excellent way to create a mutually beneficial relationship between an employer looking for light or temporary help and an employee with unique career goals. 

In this article, we’ll break down the basics of what employers should know about seasonal vs part-time employee hiring practices, including the difference between seasonal vs part-time employees, HR compliance considerations when making investments in non-traditional hiring, benefits and pay requirements for these workers, and more. Every decision counts, and at Axcet HR Solutions, we’re here to help you make the right ones. 

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Seasonal vs Part-Time Employees: What’s the Difference? 

When it comes to the difference between seasonal vs part-time employees, it’s important to understand that while one employee can be both part-time and seasonal, the concepts aren’t the same. Seasonal employees can be part-time, and part-time employees can be seasonal, but an employee does not have to be both. For example, an employer can hire a full-time seasonal employee. There is no “better” option between seasonal vs part-time employees—you should make the hiring decision that suits your unique business needs. 

What is a Part-Time Employee? 

Both the Affordable Care Act (ACA) and the Internal Revenue Service (IRS) define a part-time employee as one who works less than 30 hours per week or works less than 130 hours per month. 

Whether you’ve had part-time employees on your payroll for years or are considering taking them on for the first time, it’s important to make sure you’re in compliance with all applicable rules and regulations at the federal, state, and local levels. Consult with an HR compliance expert to make sure you’re meeting all the requirements regarding pay, benefits, and reporting that you should be in relation to your part-time employees. 

What is a Seasonal Employee? 

A seasonal employee is hired with the understanding that their work is only expected for a specific period of time—or season. While many seasonal employment opportunities have the potential to develop into year-round work, the defining factor of seasonal employment is that both employer and employee enter into the employment relationship with the understanding that it will likely be a brief one. 

This type of employment relationship can be uniquely beneficial for businesses that see heavy summer activity, holiday activity, or other seasonal spikes. Restaurants, retail, and hospitality industry businesses as well as those businesses that support these industries are some of the most likely to seek seasonal employees. 

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Do We Have to Provide Health Insurance for Part-Time Employees? 

In short, employers are not required to provide health insurance for their part-time employees. The Affordable Care Act requires employers with fifty or more full-time equivalent employees on their payroll to offer health insurance for their full-time employees. While employers have the option to provide their part-time employees with health insurance, they may find that doing so is tricky—health insurers often will not extend coverage to part-time employees. 

The Affordable Care Act defines a full-time employee as a worker who (a) clocks a minimum of 30 hours per week with their employer, (b) clocks 130 hours each month with their employer for a period of 120 days or longer (consecutively), or both. This distinction is the same as the one used by the IRS to define full-time versus part-time work for tax purposes. 

If you’re an ACA-covered business planning to hire part-time employees with the specific intention of not providing full-time benefits (like health insurance) to them while they’re under your employ, it’s important to watch your part-time employees’ hours. Failing to offer health insurance to appropriate employees as required by the ACA could expose you to liability, including potential fines and penalties imposed by the federal government. 

With this in mind, an exception for some employers who hire seasonal employees does apply. 

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Do We Have to Provide Health Insurance for Seasonal Employees? 

As described above, ACA-covered employers, otherwise known as "applicable large employers" are required to offer health insurance to employees who work a minimum of 30 hours per week or 130 hours per month for 120 days in a row or longer. However, even for these ACA-covered employers, a narrow exception may be available for some employees offering seasonal work opportunities. 

For benefits exception purposes, the type of seasonal employee you’re hiring matters, and the ACA is careful about the distinction they impose. Because of the fine line definition of a seasonal employee under the ACA, it’s important to discuss your hiring situation with an HR compliance expert before declining health coverage to a seasonal employee who is consistently working 30 hours or more in a week or working for you for a period longer than 120 days. 

For example, while the ACA defines a college intern hired each year from June to mid-August (i.e., during their school’s summer break) as a seasonal employee, they would not classify a computer programmer hired for five months for assistance completing a special project as a seasonal employee. 

For a more complete discussion of whether you’re required to offer a seasonal employee health insurance, check out our post: Navigating Health Insurance Compliance for ACA Seasonal Employees. 

Axcet HR Solutions: Your Partner for Smart Hiring and HR Management 

Are you considering hiring seasonal vs part-time employees? Axcet HR Solutions is here to help you untangle all of your questions on employee benefits, HR compliance, reporting requirements, and more. 

At Axcet HR, you’ll find a dedicated team of HR compliance and employee relations experts ready to evaluate your workplace policies, procedures, benefits offerings, and pay processes. We’ll make improvement recommendations that are tailored to your unique industry, people, geographic locations, and more. Schedule a consultation to find out how we can help.