Nov. 16, 2017
By Samuel Lillard
It's the most wonderful time of year—retailers dashing to capture sales driven by holiday spending. According to the National Retail Federation, holiday sales are slated to increase by 3.6%, with estimated sales of up to $682 billion, in 2017.
As a result of this spending frenzy, employers in many industries—including retail and hospitality—need to plan carefully for the season. For many businesses, this involves a rapid surge in the hiring of seasonal employees. Unfortunately, this can come with many avoidable problems for the unwary employer.
1. Set Expectations Up Front
With the rush to staff the registers with holiday workers, many employers make the simple mistake of failing to inform the new hires that their employment is limited to the season. Each year, there are always some employees who think they're hired for the long haul, only to angrily discover they were seasonal when laid-off. This disparity in expectations can lead them right to the door of an attorney to pursue a revenge claim. Although most employees—seasonal or otherwise—are hired as "at-will," meaning they can be let go for any legal reason, it's still a good practice to set the proper expectations at hire. The best way to do this is by informing any seasonal employees in writing that their position is "at-will," temporary and likely to end on a specific date unless informed otherwise. This also makes the eventual task of laying off seasonal employees less of a trigger point for disputes.
2. Hidden Costs of Seasonal Hiring
Employers should also consider the effect on unemployment claims. A flurry of seasonal hires and subsequent fires can result in several unemployment claims. While this impact is slightly different with each state, unemployment benefits in Ohio can generally be given to temporary or seasonal workers if they meet Ohio's eligibility rules. In Ohio, an unemployed seasonal worker is entitled to unemployment benefits if, at the time of unemployment, the worker had worked at least 20 weeks for some employer and received an average weekly wage of at least $247. Employers should keep these potential costs to their unemployment tax contributions in mind when evaluating the benefits of hiring seasonal employees.
3. Usual Practices Get Pushed Aside
In the rush to get seasonal employees to work, employers sometimes fail to conduct typical on-boarding procedures, such as employment policy training, background checks or post-offer drug testing. The common thinking is: "What harm can they do? They'll only be here for a short time." This can be a costly mistake. No employer wants to end the holiday season facing a stack of discrimination charges filed with the EEOC, especially claims that could have been prevented by an employee's review and acknowledgment of the employer's workplace policies. A well-written employee handbook can limit liability for the employer, set clear expectations for workplace conduct and prevent problems from getting out of hand with clear complaint procedures. But even the best handbook is worthless if employees never receive it.
4. Incomplete Information About Hires
Some employers may be tempted to skip conducting their usual pre-employment background checks. Big mistake. Although many retailers see their biggest sales between October and January, these months also account for about half of all annual theft. According to the latest Global Retail Theft Barometer, employee theft in the U.S. outranks shoplifting as the number-one reason for missing inventory. Conducting background checks for even seasonal employees can be a good step at making sure employers are not giving thieves the keys to the store.
Employers should also not skimp on new-hire drug testing for seasonal workers. Unfortunately, employers are seeing a serious increase in the number of employees testing positive for drug abuse. Workplace drug use poses significant costs to employers, typically in the form of productivity loss, tardiness, absenteeism and even theft. Plus, it's been reported that 47% of all workplace accidents with serious injuries involve drug use. It's true that some employers have had such difficulty in finding qualified employees who can pass a drug test that they've dropped testing altogether in order to fill positions. This is not a good approach. According to the 2015 National Survey on Drug Use & Health, employees in organizations without a drug testing program have a 30-40% higher self-report of past month drug use. Although an employer may fill the positions without testing, it may actually encourage more drug use and an increase in more work problems, including workplace theft, accidents and injury claims
Although seasonal employees may be a key part of the holiday workforce for many employers, they do pose potential problems for the unwary employer. The good news is these problems are generally avoidable where employers stick to their usual hiring practices.
Samuel Lillard is Of Counsel at the Columbus office of Fisher Phillips, a national management-side labor and employment law firm.