Mastering Summer Hiring: Navigating Seasonal Workers, Interns, and Payroll Compliance with Ease

Planning to boost your workforce this summer? Exciting as it is, effective handling of payroll compliance for seasonal workers and interns is key to avoiding costly slip-ups.

Every summer, small business owners face challenges with payroll, compliance, and worker classification when onboarding part-time staff or interns.

Misclassifying a W-2 employee as a 1099 contractor, even temporarily, can result in significant penalties.

Understanding Worker Classification: Employees vs. Contractors

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Common misconceptions include assuming temporary or part-time engagement allows for contractor status.

If your business controls the work specifics, you likely need to issue a W-2, regardless of the work duration or nature.

The IRS has specific guidelines for worker classification, emphasizing payroll taxes over contractor payments.

Interns: Are They Employees?

Unpaid internships often lead to classification errors. Unless linked to educational programs without compensation expectations, the Department of Labor may deem interns as employees.

  • Ensure minimum wage compliance

  • Account for payroll taxes

  • Include workers’ comp coverage where necessary

Leverage the Work Opportunity Tax Credit (WOTC)

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The WOTC offers businesses hiring target groups tax reductions, potentially lowering federal tax liabilities by up to $2,400 per hire.

  • Application must precede hiring

  • Submit paperwork to your state agency

  • Many eligible businesses miss out on this credit

Explore more about the WOTC program here.

Key Steps Before Your First Payday

  • Correct federal and state withholding setups

  • Implement an effective payroll system

  • Collection and retention of Form I-9s and W-4s

  • Review local labor laws for sick leave requirements

  • Check overtime payments even for short-term engagements

Avoid Payroll Pitfalls: A Final Word

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Ensuring compliance with payroll regulations safeguards your business from penalties, missed credits, and audits, ultimately fostering a compliant and happy workforce.

Need Expert Assistance? We’re Here to Help

Our team has successfully supported numerous small businesses in setting up compliant and efficient summer payroll systems.

Planning to onboard part-time or intern help soon? Contact us to ensure compliance and discover available tax credits.

Reach out before issuing your first paycheck—let us help you navigate the complexities.

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