Non-legal Considerations
Certainly, there are non-legal considerations to running a seasonal business. First and foremost is that the bills do not stop coming in just because you are not operating or selling your service. If the company does not save up enough money throughout the year to cover off-season costs, it will be in trouble. For example, if your client has a loan, the bank is still expecting a monthly payment in January, even if there is no money coming into the company because it is off-season.
One bill that happens monthly is the workers’ compensation insurance premium. Most WC policies require that an employer estimate the year-long employee compensation (which can be difficult for hourly work) and then they do computations based on that number and a ratio that reflects the potential for harm. We will talk about WC later in the course. For now, just understand that the insurance company will come up with a monthly premium that will have to be paid. Good news though, there are some companies that charge for WC insurance based on the payroll for the month. This is a game-changer for all seasonal employers or really any employer who has sporadic compensation requirements. For instance, if Lennie’s is not doing any lawn mowing in February, he can put down $0 for the compensation in February and he will have a $0 insurance bill. This helps greatly.
Another non-legal consideration to keep in mind, which was brought up in a conversation with Attorney Devon Kennefick, is that seasonal employers should keep up-to-date tax documents and quarterly reports. When applying for H-2A and H-2B visas, these documents are essentially required to prove to the government that the employer is a seasonal business. Attorneys who counsel employers on getting involved in these programs should become familiar with reading federal tax returns, quarterly reports, and payroll records, to make sure the employers are compliant and eligible.
💡What advice or suggestions do you have for your seasonal business client?
Hiring and training new employees each season is time-consuming and can be costly. There is no guarantee that good workers that the company would like to hire again will be available.
💡What solutions can you think of regarding employee retention or new hiring? What other problems do you foresee?
