Unemployment benefits are designed to help workers temporarily overcome difficulties caused by a loss of employment that came about due to no fault of their own. Some people find themselves with reduced hours or are only able to find part-time employment, while others work as farmers, gardeners, tourism workers, fishermen, or in retail with their services only required during certain peak seasons. A key to managing employer tax costs is understanding seasonal and part-time workers unemployment benefits eligibility.
As seasonal and part-time workers typically work less over the course of a year, they are more likely to experience financial instability, yet they are not eligible for certain benefits that are available to full-time employees. However, in some situations, they may qualify for unemployment benefits, which can help improve their financial situations significantly during the off-season or before they find a full-time job.
Unemployment tax rates for employers vary from state to state, but the more claims filed and paid against a business’s unemployment tax account, the higher their unemployment tax rate. One way employers can reduce unemployment tax costs is to properly categorize employees as seasonal and part-time workers. Unemployment claims eligible for benefits may change depending on this and financially impact an organization.
Differences Between Seasonal and Part-Time Workers
Seasonal workers are just as the name implies, workers that are hired for a specific season or a standard time period during the year when an employer needs additional bandwidth to meet their production demands. Although these individuals are hired with the knowledge that their job is for a specific duration, this does not prohibit them from filing and potentially drawing unemployment benefits.
While there is no standard definition of part-time employment, typically, a part-time employee is a worker who performs tasks on a reduced schedule compared to full-time employees. The Fair Labor Standards Act (FLSA) does not define what is considered a part-time employee or what constitutes part-time hours. On the other hand, the Internal Revenue Service (IRS) acknowledges a full-time employee as someone who works an average of at least 30 hours per week or 130 hours per month. Part-time employees are those who work less than 30 hours per week or 130 hours per month. According to the U.S. Bureau of Labor Statistics (BLS), part-time workers work between one and 34 hours per week, meaning that people who work over 34 hours a week are full-time employees.
Unemployment Benefits Eligibility
State unemployment insurance laws generally do not disqualify an individual based on their classification as seasonal and part-time workers. Eligibility for unemployment compensation is based on a number of factors, including the duration of employment, the employee’s earnings in their base period, and the circumstances that led to the separation from employment or reduction in hours. If seasonal or part-time workers lose work through no fault of their own and there is simply no more work for them, they may be eligible for benefits, and the employer may or may not be chargeable.
The requirements that seasonal workers have to meet in order to qualify for unemployment benefits vary from one state to another. However, seasonal workers have to meet the requirements of their states for wages earned and time worked during a certain length of time, which is typically the first four of the previous five calendar quarters before they file their claims. This means that the duration of their employment has a direct impact on their eligibility for unemployment benefits.
States also consider the reasons for unemployment when deciding whether or not to pay unemployment benefits to seasonal workers. At the end of a seasonal worker’s job assignment, the unemployment agencies consider it a lack of work situation in the same manner as a full-time employee who has been laid off. While they are eligible for unemployment benefits based on their reason for separation, they also must be able and available for work, and actively seeking further employment.
State guidelines for part-time workers also vary. For example, in Georgia, workers who have lost a full-time job, but are working part-time and earn less than their weekly benefit amount are eligible. Workers who have lost a part-time job or whose hours are reduced also may qualify to collect unemployment.
Most states provide partial benefits to individuals whose work hours have been reduced through no fault or choice of their own or employees who have lost their full-time jobs and have partially replaced the lost income with one or more part-time jobs.
Controlling Unemployment Tax Costs
There are many reasons employers decide to hire seasonal and part-time workers as opposed to full-time workers. For example, hiring seasonal and part-time workers can reduce the cost of paying full-time salaries and other expenses, alleviate workforce stress by getting extra help, fill positions that don’t require a full-time worker and serve as a test to see if employers want to hire the employee full time.
However, if employers decide to hire seasonal and part-time workers, it is critical that they examine each state unemployment compensation law and determine the eligibility requirements or any specific exclusions from benefits for these workers.
The best way for employers to reduce unemployment tax costs is to hire only those employees whom they really need and who are qualified for the job. Also, they should monitor all unemployment insurance claims, review the employment of each claimant and ensure the proper information relating to their employment is provided to the state agency and be prepared to contest any claims they believe to be improper. Given that this takes a lot of time and effort, employers can outsource managing unemployment claims. For example, correctly understanding seasonal and part-time workers unemployment benefits eligibility is important but takes additional knowledge for varying state guidelines. With the necessary expertise and resources, they can ensure responses and forms are completed on time, and efficiently deal with unemployment claims from the very beginning to effectively reduce unemployment tax costs.