Workers’ comp for holiday employees: 7 tips for hiring seasonal and temporary workers
Workers’ comp for holiday employees: 7 tips for hiring seasonal and temporary workers
Seasonal employment can be a great way to add temporary workers for retail, restaurants and catering, delivery, customer support and more. But is your business compliant and protected?
The holiday shopping, service and tourism rush can be a very lucrative time of year for small businesses — but holiday hiring logistics can be a challenge. NEXT highlights what business owners need to know: when to start recruiting, how pay and overtime work, and if seasonal employees require workers’ compensation insurance.
Workers’ compensation insurance requirements for seasonal hiring
Most states require businesses with at least one employee to carry workers’ compensation insurance. This coverage can help cover medical expenses, lost wages and other costs related to on-the-job injuries or illnesses. Workers’ comp can help protect your business from covering these costs out of pocket. It can also help provide support to injured employees so they can recover and return to work.
During the holiday rush, the risk of workplace injuries can increase. Seasonal employees are often less experienced, receive less training and are placed into fast-paced environments right away. That combination can lead to:
- Physical injuries: Slips, trips and falls, strains from lifting or moving equipment, or accidents caused by working quickly under pressure.
- Repetitive motion issues: Tasks that require constant lifting, packing, carrying or operating equipment can lead to sprains and overuse injuries.
- Fatigue and stress-related risks: Long hours, irregular schedules and high customer demand can raise the chance of mistakes that cause accidents or injuries.
Seasonal employees are usually treated the same as full-time employees or part-time staff when it comes to workers’ comp. That means if you’re required to carry coverage for your business, your temporary hires typically need to be covered, too.
Check your state’s requirements before hiring seasonal help to avoid unexpected costs and compliance headaches.
Best practice: Even temporary employees should go through basic safety training. A short orientation on lifting techniques, handling spills or navigating customer interactions can reduce the likelihood of accidents — and may also help lower the number of workers’ comp claims.
Pay rates and overtime pay for seasonal workers
Seasonal employees are generally subject to the same employment laws as regular employees, including rules on minimum wage and overtime pay. Under the Fair Labor Standards Act (FLSA), most seasonal employees must earn:
- At least the federal minimum wage ($7.25 per hour) and;
- Receive overtime pay at one-and-a-half times their hourly wage for hours over 40 in a workweek.
However, state laws differ significantly, often requiring a higher minimum wage or more generous overtime rules. (Check your state’s minimum wage.) Noncompliance can lead to costly fines or legal action, so staying informed about your local regulations is crucial.
During the holiday season, overtime becomes especially relevant. Retailers often extend hours for Black Friday, Christmas Eve and post-holiday sales, while warehouses and delivery services see demand surge right up until packages need to reach customers. These longer shifts can quickly trigger overtime pay requirements, so it’s important to budget for extra labor costs and schedule staff carefully.
There are exceptions specific to seasonal businesses. For example, employees at seasonal amusement parks or recreational facilities operating less than seven months per year might be exempt from the standard overtime pay requirements set by the FLSA. If your business falls into these categories, carefully verify your eligibility for these exemptions.
Best practices: Document employment terms — including pay rates, overtime policies, and expected work hours — to prevent misunderstandings and potential disputes. Consult a labor attorney or your state labor department before hiring seasonal workers to ensure you're fully compliant.
7 tips for hiring and retaining seasonal employees
These tips can help you find quality seasonal workers when you need them most.
1. Start recruiting early to beat the rush
Labor shortages make it increasingly important to recruit early and strategically.
Small businesses can face tough competition for seasonal talent. A 2025 NEXT survey found that labor shortage concerns have doubled — now a concern for 30% of small business owners — since the last pulse check in 2023. It saw the biggest increase among all sources of stress for small business owners.
Holiday seasonal employment usually lasts from late October or early November through the start of January, covering shopping events like Black Friday, Cyber Monday, Small Business Saturday and the peak holiday gift-giving weeks.
Employment duration varies. For example, a retail store may hire temporary staff for just a few days around Black Friday weekend, while a warehouse may need seasonal help for several months to handle increased shipping demand.
Use local job boards, social media, university bulletin boards, or holiday hiring platforms to gain a head start over your competition. A few popular job boards include:
2. Clearly define holiday job expectations
Seasonal workers thrive when their roles are clearly defined. When creating job descriptions, state job responsibilities, work schedules, pay rates, overtime expectations and the exact duration of the position in your job listings and interviews. Transparency helps holiday hires fully understand their roles, reduces turnover and helps employees stay motivated throughout the busy holiday season.
3. Focus on candidates specifically seeking holiday seasonal work
Target candidates explicitly interested in holiday-only roles. College students, students on winter break, teachers off for the season, stay-at-home parents with limited time and retirees seeking extra cash make ideal candidates.
Mark your job postings with clear language such as "holiday seasonal," "temporary winter positions," or "perfect for students seeking holiday jobs." This specificity ensures applicants fully understand the short-term nature of the work, minimizing unexpected turnover mid-season.
4. Prioritize enthusiasm and adaptability for the holiday rush
Most temporary work doesn’t require extensive experience. Attitude and adaptability are key to successful seasonal hires. Look for candidates with energy, enthusiasm and strong interpersonal skills.
DIY manufacturing shop owner April Wilkerson looks for these traits when vetting new team members. “Anybody who shows a willingness to want to be on my team and be in my world, I say, ‘Sure, let’s give it a try.” But she also advises owners to know when things aren’t going to work out.
During interviews, ask questions that assess adaptability to the fast-paced holiday rush, such as, "Tell me about a time you had to be flexible or shift gears fast during work," or "How do you handle high-pressure situations like long customer lines or back-to-back deliveries?"
5. Give preference to returning seasonal workers whenever possible
Returning workers already know your company’s culture and processes, and require minimal retraining.
Maintain seasonal employee relationships during the off-season. Check in periodically to ensure your former holiday workers return eager and ready to contribute again. Retailers especially rely on past seasonal hires who already know holiday systems and culture.
6. Offer holiday-specific perks and incentives
Make your seasonal jobs more attractive with holiday-oriented perks such as flexible scheduling, employee discounts on gifts, end of season bonuses, or team-appreciation events like team dinner or outings. These incentives may help attract higher-quality candidates who might otherwise choose other holiday opportunities.
7. Streamline onboarding to maximize holiday productivity
The holidays pass by in a blur, so you’ll want your new hires to be productive quickly. Develop concise, efficient onboarding and training materials — such as checklists or short training videos — to speed up the process.
Benefits and disadvantages of hiring for holiday jobs
A few benefits for business owners hiring for the season include:
- Flexible schedules: Scale up or down quickly to accommodate holiday spikes by controlling how many staff you hire, when you hire them and how long their employment lasts.
- Lower employment costs: Eliminate the costs of hiring full-time staff by hiring seasonal employees to work during busy seasons only.
- “Test-driven” employees: Use the seasonal hiring period to determine if an employee is a good fit for your business year-round.
Some potential downsides of hiring for seasonal holiday jobs include:
- Workers with less training: Due to the brief period of employment, you’ll have less time to train seasonal employees. It could result in lower-quality work.
- Lack of loyalty: Seasonal staff don't have as much skin in the game as regular employees, which could make productivity and performance suffer. They could also be more likely to leave midseason, forcing you to hire again during your busiest time of year.
- Legal hurdles: Hiring seasonal staff may have different laws and requirements. Make sure you understand the rules around seasonal labor in your area.
This story was produced by NEXT and reviewed and distributed by Stacker.
