Mastering Summer Payroll: Avoid Common Errors with Seasonal Workers and Interns

Image 3

Is your business gearing up for summer hiring? While the season can bring fresh talent and added workforce flexibility, it also presents potential payroll challenges that can catch even the savviest business owners off-guard. At Haley Claypool & Associates, our expertise ensures that your seasonal hiring doesn’t result in compliance headaches.

Clarifying Employee vs. Contractor Status

A common misconception among businesses is categorizing all temporary hires as contractors. Remember, if you have oversight over their work schedule and tasks, they are likely employees in the eyes of the IRS, necessitating W-2 tax forms rather than 1099s. Misclassification could lead to substantial penalties.

For definitive IRS criteria on worker classification, refer to their comprehensive guidelines here.

Image 1

Interns: Ensure Compliance

Internships often fall into a gray area. If your interns are providing real value to your business, they should receive compensation under FLSA guidelines unless part of a formal, unpaid educational program. This means adhering to minimum wage laws and potentially covering payroll taxes and workers’ comp insurance.

Leverage the Work Opportunity Tax Credit (WOTC)

Have Questions?
Let's talk. We are here to help!
Contact Us

There's a silver lining for businesses hiring from specific groups like veterans or long-term unemployed individuals. The WOTC can offset federal tax liability significantly—up to $2,400 per eligible hire. It’s crucial to initiate the application process pre-hire and navigate it through your respective state agency.

Discover more details on accessing the WOTC here.

Image 2

Preparations Before Issuing First Paychecks

  • Confirm proper federal and state withholding setups
  • Maintain an efficiently operating payroll system to keep up with filing requirements
  • Secure and retain necessary forms such as I-9s and W-4s
  • Stay informed on local labor laws regarding part-time worker reporting and leave policies
  • Check overtime payment requirements, even for temporary summer roles

Conclusion: Professional Guidance on Payroll

For businesses, summer should be a time of growth, not missteps in payroll compliance. The costs of errors like misclassification or ignoring applicable tax credits can be major, including fines and potential audits. At Haley Claypool & Associates, we ensure that hiring is smooth and compliant.

Contact us today via email or call us at 818-338-8700 before you commence your summer hiring. Let’s ensure everything is set correctly right from the start.

Have Questions?
Let's talk. We are here to help!
Contact Us
Share this article...

Sign up for our newsletter.

Each month, we will send you a roundup of our latest blog content covering the tax and accounting tips & insights you need to know.

I confirm this is a service inquiry and not an advertising message or solicitation. By clicking “Submit”, I acknowledge and agree to the creation of an account and to the and .

We care about the protection of your data.