Seasonal employment definition and meaning
Seasonal employment refers to temporary work that helps employers meet staffing needs during holidays, high seasons, or other peak business periods.
Updated: May 7, 2025
Seasonal employment refers to temporary work that helps employers meet staffing needs during holidays, high seasons, or other peak business periods.
Simply put, seasonal employment can make a lot of sense for businesses that are only open for part of the year or may require extra hands at different times of the year. Individuals who fill these roles are typically temporary workers who are only occasionally on the payroll, rather than traditional, full-time employees, who employers expect to be available year-round.
For example, a retailer may bring on a sizable number of seasonal employees in December, when consumer demand might be at its peak because of the holidays. Some of the most common examples of seasonal positions, aside from the retail scenario we just highlighted, include delivery drivers, tour guides, tax professionals, event staff, hospitality workers, servers and bartenders, and even customer service representatives.
According to the IRS, a seasonal employee is someone who performs labor or services for a duration of 12 months or less. For example, if you hire a worker in December to help you with the holiday rush, but they end up staying for the next 12 months, they’re no longer considered a seasonal employee. Regardless of whether your employees are seasonal or full-time, they must complete a W-4 tax form so you can report their income to Uncle Sam. This form will also help you to know how money you should withhold from their paychecks to cover federal and state taxes.
The IRS views seasonal workers the same as full-time employees or any other type of employees. Therefore, seasonal workers are subject to tax payments. When you pay a seasonal employee, you must withhold federal income tax, Social Security and Medicare taxes (FICA), and state and local income taxes. In addition, you’ll need to report their wages, including tips and other forms of compensation on Form W-4, just like you would for a full-time employee.
It’s up to you as the employer to establish a pay process for seasonal employees. Depending on your state, you might have to pay a minimum wage that exceeds the federal minimum wage. The minimum wage might also vary based on a seasonal employee’s line of work. Also, you’ll need to determine an overtime pay rate for when a seasonal employee who is nonexempt from the Fair Labor Standards Act (FLSA) works more than 40 hours per week.
While this rate will likely be one and a half times your seasonal worker’s regular rate, it will depend on your state’s regulations. When it comes to pay frequency, weekly or bi-weekly pay periods are often ideal for seasonal employees. While these pay periods may increase your administrative burden, they can provide your seasonal workforce with a more consistent income stream, ideally increasing morale and retention. Depending on your business, cash flow, and priorities, may also want to give seasonal employees the opportunity to access their wages in between paychecks.
Seasonal employees are widely used (and generally realize the work is going to be temporary) in a number of industries, including:
A part-time employee works fewer than 30 or 40 hours per week. Part-time employees are common in hospitality, retail, and sales as they help businesses in these industries with their operations when there are not enough duties for them to work full time hours. A seasonal employee, on the other hand, is a part-time employee that only works during periods where a business requires additional support. Seasonal employees may work for a few months or even a few weeks. While seasonal employees only work during a specific time of the year, part-time employees may work year-round. Both seasonal and part-time employees may eventually transition into full-time roles.
The most noteworthy benefits of seasonal employment include:
Before you move forward with seasonal employees, consider these disadvantages:
In most cases, seasonal employees do not receive traditional benefits that may be available to full-time employees, such as health insurance and 401(k) retirement plans. However, you may decide to offer fringe benefits to attract the top seasonal candidates and motivate them to perform well. Here are several examples of fringe benefits you might consider for your seasonal workers:
A seasonal employee may be eligible for unemployment benefits. It all depends on the state laws, how long they were employed, their earnings, and the circumstances that led to the termination or reduction in work hours. Note that some states do allow seasonal employees that get laid off to collect unemployment for the rest of the off-season while others do not. It’s important to become familiar with the unemployment laws in your particular state.
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