Hustling to Hire Seasonal Workers in California? Know the Applicable Laws

In August, while many people were enjoying a late-summer vacation, Jennifer Lema was preparing for Christmas. The senior HR manager for VF Outdoor works months in advance to make sure her company's stores are adequately staffed for the frenetic holiday season.

Her employer, the retail parent of lucy Activewear, The North Face and Jansport, expects its 2,600-person workforce to swell to more than 4,000 as it adds seasonal workers to ring up ski jackets, yoga pants and sweaters. "The percent of revenue they do in Q4 is mind-boggling compared to what they do the rest of the year," said Lema, who is based at company headquarters in Alameda, Calif.

Seasonal workers are in high demand nationally as businesses prepare for the annual crush of customers. Target announced in September it would add 100,000 seasonal store workers and another 4,500 in distribution centers and warehouses. Macy's will take on about 80,000 temporary workers, including about 18,000 for order fulfilment. Amazon will onboard nearly 120,000 warehouse workers, almost doubling its staff, USA Today reported.

[SHRM members-only toolkit: Complying with California Wage Payment and Hours of Work Laws]

Low Unemployment, High Demand

Merchants and service providers such as UPS add about 604,000 holiday-related jobs each fall nationwide, according to outplacement firm Challenger, Gray & Christmas. A very low unemployment rate—4.1 percent in October—is putting added pressure on employers to secure enough extra hands to staff cash registers and stock rooms.

Competition for staff can heighten risks in hiring temporary workers, cautioned Jonathan M. Brenner, an attorney with Epstein Becker & Green in Los Angeles. He recommends that HR professionals establish a screening process and onboarding plan long before their employers face a hiring squeeze. Otherwise, rushed managers may be tempted to cut corners on essential practices such as background checks.

Businesses can save time and hiring headaches by contracting with staffing agencies to fill seasonal positions. That arrangement, however, comes with other responsibilities for HR professionals. They must make sure front-line managers understand the scope of work that the agency's contract permits seasonal laborers to perform.

Make Time for Tracking

Temp agencies may require their workers to use a time-tracking system or app, said Bruce Sarchet, an attorney with Littler Mendelson in Sacramento. Because California has strict and detailed laws governing meal and rest breaks, HR professionals should verify that temporary workers are using a reliable time-tracking system and using it consistently.

Temporary workers might have previously held jobs where off-the-clock work was tolerated, encouraged or required, so they may not be accustomed to recording their meal and rest breaks. Thorough onboarding should emphasize the importance of compliance, Brenner said.

VF Outdoor requires seasonal employees to read and acknowledge receipt of the same policies and procedures that regular workers must sign off on, Lema said. The company's HR team created a one-page summary of essential holiday-time hiring issues and a quick-reference guide for hiring and firing. Those resources help busy managers easily find information, boosting the likelihood of compliance with company policy.

Lema's company also uses an HR management system that provides a paperless onboarding process for new hires. Managers receive alerts when a new hire's file is incomplete so they can remind workers to submit outstanding documents. The system "puts a lot of guardrails in place," Lema said.

Proper Classification

HR professionals should also confirm that staffing agencies are correctly classifying seasonal workers for tax-reporting purposes. Workers should be categorized as employees of the staffing companies, not independent contractors, and should receive W-2 tax forms from the agency, not the 1099 forms issued to independent contractors, Sarchet said. If the agency is issuing 1099 forms, it is not making Social Security and unemployment benefit payments, as the law requires.

Attorneys who advise businesses are closely watching proposed federal legislation that could change businesses' liability for labor violations when using staffing agencies. The Save Local Business Act, which passed the House of Representatives on Nov. 8, would hold businesses liable for labor violations committed by a staffing agency or contractor only when the businesses have "direct control" over the agency's workers.

The legislation would reverse a 2015 National Labor Relations Board decision involving a Golden State business, Browning-Ferris Industries of California. The labor board had held that businesses with indirect control over temporary workers could be considered their employer and share liability with the staffing agency for labor violations.

California businesses must also follow the state's joint-employer rules. For example, starting with contracts entered into on Jan. 1, 2018, general contractors will be held jointly liable for their subcontractors' unpaid wages and benefits. 

New Laws to Consider

Before hiring temporary workers, California businesses should ensure they may proceed without first offering additional hours to current part-time workers. San Francisco requires chain restaurants and stores to give qualified workers dibs on extra hours before hiring new workers. 

Since March 13, San Jose's "Opportunity to Work" ordinance has required businesses with at least 36 workers to offer more hours to qualified current workers before hiring additional staff or contracting with staffing agencies. Legislation introduced by Assemblywoman Lorena Gonzalez Fletcher (D) that sought to expand that measure statewide and have it apply to businesses with at least 10 workers stalled over the summer. The statewide proposal is expected to resurface in the 2018 legislative session.

It's still legal to ask for a potential hire's salary history and criminal record, though not for long. Effective Jan. 1, employers will no longer be permitted to ask candidates what they were paid at previous jobs. California's "ban-the-box" law will also forbid inquiring about a candidate's criminal history until after a conditional job offer has been made.

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