Workers’ comp for holiday employees: 7 tips for hiring seasonal and temporary workers

October 16, 2025

Seasonal employment can be a great way to add temporary workers for retail, restaurants and catering, delivery, customer support and more. But is your business compliant and protected?

The holiday shopping, service and tourism rush can be a very lucrative time of year for small businesses — but holiday hiring logistics can be a challenge. NEXT highlights what business owners need to know: when to start recruiting, how pay and overtime work, and if seasonal employees require workers’ compensation insurance.

Workers’ compensation insurance requirements for seasonal hiring

Most states require businesses with at least one employee to carry workers’ compensation insurance. This coverage can help cover medical expenses, lost wages and other costs related to on-the-job injuries or illnesses. Workers’ comp can help protect your business from covering these costs out of pocket. It can also help provide support to injured employees so they can recover and return to work.

During the holiday rush, the risk of workplace injuries can increase. Seasonal employees are often less experienced, receive less training and are placed into fast-paced environments right away. That combination can lead to:

• Physical injuries: Slips, trips and falls, strains from lifting or moving equipment, or accidents caused by working quickly under pressure.

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• Repetitive motion issues: Tasks that require constant lifting, packing, carrying or operating equipment can lead to sprains and overuse injuries.

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• Fatigue and stress-related risks: Long hours, irregular schedules and high customer demand can raise the chance of mistakes that cause accidents or injuries.

Seasonal employees are usually treated the same as full-time employees or part-time staff when it comes to workers’ comp. That means if you’re required to carry coverage for your business, your temporary hires typically need to be covered, too.

Check your state’s requirements before hiring seasonal help to avoid unexpected costs and compliance headaches.

Best practice: Even temporary employees should go through basic safety training. A short orientation on lifting techniques, handling spills or navigating customer interactions can reduce the likelihood of accidents — and may also help lower the number of workers’ comp claims.

Pay rates and overtime pay for seasonal workers

Seasonal employees are generally subject to the same employment laws as regular employees, including rules on minimum wage and overtime pay. Under the Fair Labor Standards Act (FLSA), most seasonal employees must earn:

At least the federal minimum wage ($7.25 per hour) and;

Receive overtime pay at one-and-a-half times their hourly wage for hours over 40 in a workweek.

However, state laws differ significantly, often requiring a higher minimum wage or more generous overtime rules. (Check your state’s minimum wage.) Noncompliance can lead to costly fines or legal action, so staying informed about your local regulations is crucial.

During the holiday season, overtime becomes especially relevant. Retailers often extend hours for Black Friday, Christmas Eve and post-holiday sales, while warehouses and delivery services see demand surge right up until packages need to reach customers. These longer shifts can quickly trigger overtime pay requirements, so it’s important to budget for extra labor costs and schedule staff carefully.

There are exceptions specific to seasonal businesses. For example, employees at seasonal amusement parks or recreational facilities operating less than seven months per year might be exempt from the standard overtime pay requirements set by the FLSA. If your business falls into these categories, carefully verify your eligibility for these exemptions.

Best practices: Document employment terms — including pay rates, overtime policies, and expected work hours — to prevent misunderstandings and potential disputes. Consult a labor attorney or your state labor department before hiring seasonal workers to ensure you're fully compliant.

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