Warmer temps, longer days, fun in the sun…it’s summertime, and, as they say, the livin’ is easy. That may be true to an extent, but if you run a seasonal business or one that ramps up in the summer, you already know that your business doesn’t take a vacation. And if you rely on seasonal employees, you probably also know what an added layer of complexity that can add to your accounting and payroll.
Your teams must fully understand the legal requirements for summer hours, overtime, and time tracking. Let’s look at some types of summer hours and seasonal employment and what you should know about complying with Fair Labor Standards Act (FLSA) requirements.
What are summer hours?
Summer hours mean something different depending on the type of work you do. For example, business owners sometimes implement summer hours as an extra perk for exempt employees who work a regular Monday- Friday workweek. It could be “Summer Fridays,” when employees leave the office at 3:00 for an early start to the weekend, or giving employees every other Friday off.
If summer is a quiet time for your business, a more flexible or reduced schedule might work well for your team— improving morale and productivity as everyone aims to wrap up their tasks promptly.
This kind of summer-hours policy for exempt workers generally won’t impact labor law compliance. Where it gets trickier is when a company hires seasonal workers.
Seasonal employment categories
As amusement parks, water parks, summer camps, and certain restaurants gear up for their busy season—or their only season— it’s essential for owners of these types of businesses to understand labor laws and regulations for tracking and paying employees for overtime.
Seasonal employees are temporary part-time or full-time workers hired to meet labor demands during certain times of the year. For example, they may work for:
- Businesses open only during summer, such as water parks or summer camps.
- Businesses that peak during the summer, such as beachside hotels or bars.
Let’s explore the differences between these two types of seasonal business categories and how they handle overtime.
Overtime rules for seasonal businesses
According to the FLSA, businesses open for only part of the year, such as summer camps and ski resorts, do not need to pay employees overtime. The FLSA is administered by the U.S. Department of Labor and establishes standards for minimum wage, overtime, recordkeeping, and child labor.
Generally speaking, your business is exempt from paying overtime if it:
- Operates fewer than seven months per calendar year.
- Has average receipts for a period of six months in the previous calendar year that do not exceed 33 1/3 percent of average receipts of the other six months.
Business owners who believe their employees are exempt from overtime should visit the FLSA website for more detailed qualification criteria.
Remember that your business must still comply with any other federal, state, or local laws governing your business type or industry. For example, non-managerial landscapers may not work in the winter but are usually entitled to overtime pay.
Overtime rules for year-round businesses that hire seasonal employees
Temporary seasonal employees at businesses that operate year-round are non-exempt and are entitled to overtime. Overtime pay is one and one-half times the employee’s regular pay rate for each hour worked over forty hours in one week.
An example is a hotel resort that is open all year but is much busier during the summer months. They likely need additional staff to manage the seasonal fluctuation. Those team members qualify for overtime.
Complying with labor laws
As a business owner, you’re required to adhere to the federal, state, and local laws established by the FLSA, such as keeping accurate records for each non-exempt worker. Records must include the following:
- Time and day of the week when the employee’s work week starts
- Hours worked each day
- Total hours worked each week
- How the employee’s wages are paid, for example, “$15 per hour” or “$500 per week”
- Regularly hourly pay rates
- Total daily or weekly straight-time earnings plus total weekly overtime earnings
- Employee’s full name, Social Security number, birthdate if younger than 19
- Additions to or deductions from the employee’s wages
- Total wages for each pay period
- Date of payment and the pay period covered by the payment
How to facilitate small business time tracking compliance
With such stringent recordkeeping requirements, you’ll want all your team’s time tracking to be as accurate as possible. Non-compliance can get you in legal trouble if the United States Department of Labor investigates your business.
While you could use timesheet templates that require your employees to track time by hand, that method leaves lots of room for errors and miscalculations.
The better way? Use time tracking software and a mobile app that gives your seasonal workers a timecard right on their phone or computer. Your team can track and submit time directly from their device, and managers can quickly view and approve employee timesheets. Integrate it with your accounting software and simplify payroll, too.
Implementing such an easy, time-saving time tracking solution allows your summer team to focus on serving your customers so they’ll keep coming back year after year. Automating time tracking records helps set the foundation for more peace of mind, payroll efficiency, and a season of sunny profits.
