June 3, 2015 – “Schoooooooool’s … out … for … summer,” Alice Cooper famously sang. And with many high school and college students on their annual extended break, many employers turn to this available workforce to fulfill vital seasonal employment needs. While providing a convenient opportunity for income, there are several employment law issues to consider with seasonal employees.
Equal Employment Opportunity Laws
All seasonal employers should be mindful of equal employment opportunity (EEO) laws. Federal and state laws provide protections against unlawful discrimination on the basis of defined, protected classes. Under federal law, these protected classes include race, color, religion, sex, pregnancy, national origin, age, disability, or genetic information.
The Wisconsin Fair Employment Act (WFEA) adds to this list by also protecting individuals in this state on the basis of arrest and conviction record, marital status, sexual orientation, and use or nonuse of lawful products away from work.
Importantly, all employees, regardless of the duration of the employment relationship, qualify for the protections of the WFEA. This means that any seasonal employer in Wisconsin may be held liable for violation of the WFEA.
Employers with at least 15 employees will also qualify for most federal EEO laws, which come with the possibility of increased damages for violation.
Seasonal employers that must quickly add labor should make sure individuals participating in the hiring process are trained on the protections these laws afford to individuals. A violation could result by relying on protected class-related information available through social media to make the decision not to hire an individual.
At the same time, an individual who has information to believe that he or she lost a seasonal job or was denied a seasonal position on the basis of his or her protected class status may pursue a charge of discrimination through the federal Equal Employment Opportunity Commission or the Wisconsin Department of Workforce Development, Equal Rights Division.
Periods of Leave
One of the most challenging employment law issues for any employer is when an individual needs a period of leave for health-related concerns. While seasonal employers are not legally required to provide all leave rights established by federal and state law, many may be surprised that they should not deny any and all requests for leave.
Jesse R. Dill, Marquette 2010, practices employment law with Walcheske & Luzi LLC, Brookfield and Appleton, and is co-chair of the Milwaukee Bar Association Labor and Employment Law Section. He assists clients with all aspects of employment law, including compliance counseling and litigation.
Periods of leave from employment are often associated with the federal Family and Medical Leave Act (FMLA) or the Wisconsin Family and Medical Leave Act (WFMLA).
These laws grant employees leave from employment for reasons related to the individual’s serious health condition or a family member’s serious health condition. However, seasonal employees are unlikely to qualify for the benefits of either law as each requires the individual to be employed for a year and to work a certain number of hours within the preceding year.
However, this does not mean that an employer can ignore all requests for leave raised by seasonal employees. A seasonal employee may have a legally protected right to leave under the protections of the federal Americans with Disabilities Act, as amended (ADA), or the WFEA. Under either law, an employer may be required to grant a period of leave as a reasonable accommodation for an employee with a disability.
A seasonal employee does not need to work for the employer for any certain period of time to be protected by the ADA or WFEA. Typically, the shorter and more defined the leave, the more likely the employer is to have to grant it. A request for longer, indefinite request for leave is more likely to be considered to present the seasonal employer with an undue hardship to granting such an accommodation.
Many employers enjoy the chance to offer college students a seasonal opportunity to gain valuable experience under the company’s internship program. However, employers that offer unpaid internship positions should regularly consider whether individuals fulfilling those roles qualify as compensable employees under federal or state law.
The federal Fair Labor Standards Act (FLSA) and the Wisconsin Wage Payment and Collection Laws (WWPCL) provide minimum wage and overtime requirements for employees. By law, the FLSA defines the term “employ” broadly.
While an employee of a small, local employer with less than $500,000 in business may not qualify for the protections of the FLSA, the WWPCL provides similar protections in these respects and applies to all Wisconsin employers.
Over the past five years, the federal Department of Labor has emphasized enforcement of the FLSA for unpaid interns who should qualify as compensable employees. Compounding the concern for employers are recent class-action lawsuits in the media and entertainment industries where former unpaid interns have sought to collect wages for the summer hours spent in these positions.
Determining whether an unpaid intern should receive compensation under federal law is currently subject to two different tests. Under the first, a court analyzes a series of six factors proposed by the Department of Labor that must all be met to deny an employment relationship exists. Alternatively, a court may undertake the “primary beneficiary” analysis to determine who primarily benefits from the internship – the individual or the employer? Thus, any employer with an unpaid internship program should consult an attorney familiar with these laws to avoid gaining class-action experience.
Seasonal employment presents unique issues of eligibility for unemployment benefits in Wisconsin.
Employers may receive tax advantages by seeking designation as a “seasonal employer.” An employer who qualifies as a seasonal employer by law may be subject to a lower tax rate. To be designated as a seasonal employer, an entity must meet several criteria, which include being in a certain industry and only operating during two calendar quarters a year. Other criteria, and required forms, are available on the Department of Workforce Development website.
Individuals applying for benefits may have special concerns where they hold seasonal positions. By statute, a seasonal position may be exempt from reporting requirements or benefit payment. For example, a caddy on a golf course may not receive unemployment benefits.
Moreover, an individual seeking unemployment benefits may receive a higher benefit rate depending on when he or she applies for benefits. An individual’s eligibility and amount of unemployment benefits is determined by examining the five calendar quarters preceding the claim for benefits. The unemployment benefit rate an individual receives is determined by the amount earned in the highest quarter and the amount earned in the other quarters. An individual is unlikely to be eligible for unemployment benefits based on seasonal employment alone but the wages considered for eligibility may come from more than one employer.
The potential change in rates an individual may receive can occur because the last completed quarter is not considered part of the individual’s base period for benefits. That is, a seasonal employee who experiences a layoff near the end of June or the end of September may receive a higher benefit rate depending on whether he or she files a claim before or after the end of the quarter. Individuals with questions about unemployment eligibility or benefits may begin by consulting the Department of Workforce Development website and the Handbook for Claimants.
Seasonal employees injured on the job are likely to receive compensation under workers’ compensation. Few employers are excluded from workers’ compensation insurance requirements in Wisconsin. An employer is covered and must obtain workers’ compensation insurance if it employs three or more employees.
Those employers with less than three employees may still be required to obtain workers’ compensation insurance if their payroll is $500 or more in any calendar year quarter. Thus, seasonal employers should confirm they have obtained a workers’ compensation insurance policy or confirm with counsel that they are in the minority and not subject to workers’ compensation requirements. Seasonal employees injured on the job should report the injury to their employer.
School may be out soon, but summer break doesn’t apply to lawyers. Knowing how seasonal employment impacts the rights and obligations of employers and employees is an important aspect of assisting clients who rely on seasonal work in Wisconsin.