Asheville-area leisure and hospitality has a difference of around 3,400 workers – about 14% of the total number of people employed in that industry – between the February lows and June peaks. That shift can create a number of very real challenges for employers. While the first thing to come to mind is often the difference in scheduling, the change in seasonal employment also moves seasonal employers across two very different legal thresholds that many owners have never had to think about together.
One Headcount Number Doesn’t Fit All Compliance Rules
Most employers assume, reasonably enough, that “employee count” is a clearly defined number that means the same thing regardless of who is asking. In reality, however, North Carolina counts employees differently depending on which law is asking – and seasonal/tourism employers are the group most likely to be tripped up by the mismatch. If you’re dealing with seasonal employees, especially if it significantly changes the number of people working for you over the course of the year, make sure you’re familiar with the difference and how it may impact your business.
The E-Verify Under-9-Month Exclusion, Explained
Under N.C. Gen. Stat. § 143-133.3, using the E-Verify system to ensure that employees are eligible to work in the United States becomes mandatory at 25+ employees. That means as soon as you have 25 or more employees working for your business, you are subject to those requirements. However, any employee whose term of employment is less than nine months in a calendar year doesn’t count toward that 25. Those requirements are confirmed in the NC DOL’s E-Verify FAQ.
Suppose, for example, that you are a rafting outfitter with 20 year-round staff. During the summer, you hire 40 guides to take groups out on the river. Despite the fact that your business clearly has significantly more than 25 employees during the summer months, because they are seasonal hires with a shorter term of employment, they won’t trigger that change.
Note, of course, that the exclusion only affects whether the company must enroll in E-Verify. It does not remove any federal I-9 requirements for hire. Long-tenured “seasonal” workers who are rehired year after year, or whose employment is extended past that nine-month period, can push businesses over the line.
Workers’ Comp’s 3-Employee Threshold Doesn’t Give Seasonal Businesses a Break
The E-Verify requirement may not count seasonal employees, but that shift stands in direct contrast to the NC Industrial Commission rule governing workers’ compensation requirements. Workers’ comp coverage is required at just 3 employees – and that counts anyone that is employed by the company in any capacity. Full-time, part-time, and seasonal staff all count toward the total, as do corporate officers. There are no duration exclusions or exceptions for short-term employees.
That means that if you’re running a smaller rafting business – perhaps one that only has two full-time employees who stay with the company year-round – but you hire those same 4 summer guides, they absolutely count for workers’ comp. Coverage obligations can kick in as soon as a seasonal buisness opens for the year.
Where the Two Thresholds Collide — A Seasonal Staffing Timeline
When you’re dealing with seasonal staffing, keeping up with those essential requirements can be the difference between ensuring your business remains in compliance and facing extensive fines or regulatory issues. Take a look at when you can expect to manage workers’ comp or E-Verify needs, based on your employees.
MONTH: April Headcount: 2 • Workers’ Comp: NO • E-Verify: NO
MONTH: May Headcount: 10 • Workers’ Comp: YES • E-Verify: NO
MONTH: June Headcount: 25 • Workers’ Comp: YES • E-Verify: YES
MONTH: July Headcount: 35 • Workers’ Comp: YES • E-Verify: YES
MONTH: August Headcount: 20 • Workers’ Comp: YES • E-Verify: NO
MONTH: September Headcount: 10 • Workers’ Comp: YES • E-Verify: NO
Common Mistakes WNC Employers Make During Ramp-Up and Ramp-Down
Make sure you’re prepared for these common errors and know how to avoid them so you can keep your business in compliance with the law.
Mistake #1: Assuming the E-Verify Exclusion Means Seasonal Workers “Don't Count” for Anything
While E-Verify does exclude seasonal workers, workers’ comp doesn’t – and if you aren’t carrying workers’ comp coverage, you are out of compliance.
Mistake #2: Letting Workers’ Comp Coverage Lapse Off-Season Without Checking Next Season’s Projected Headcount
Many businesses fail to take into account what the off-season will actually look like for their brand as it grows. Because the threshold is so low, you may end up with enough staff remaining to need that coverage.
Mistake #3: Misclassifying Seasonal Staff
Some businesses may misclassify employees as 1099 contractors in an effort to dodge workers’ comp or E-Verify thresholds. However, misclassification can mean even more penalties for your business.
Mistake #4: Losing Track of When Employees Pass the 9-Month Mark
Some businesses may not accurately track how long employees have been with them. If the position isn’t truly seasonal, or the requirements change, it may be time for E-Verify.
Mistake #5: Missing Wage-and-Hour Risks
Keeping up with tip credit accuracy, exempt and non-exempt classification for seasonal supervisors, and final paycheck timing when a seasonal assignment ends can all become more complex during those high-traffic seasonal periods. Platinum Group’s Wage & Hour Risk Assessment Worksheet can help you assess your risks and avoid them.
A Seasonal Compliance Checklist for Ramp-Up and Ramp-Down
Whether you’re ready to launch into your busiest season or you’re currently ramping down, check off these items to ensure that you remain compliant.
- Track headcount weekly during hiring season
- Flag any seasonal employee approaching the 9-month mark
- Confirm the workers’ comp policy reflects current and projected seasonal headcount, not last year’s
- Audit classification and tip-credit practices before peak season hits
- Confirm state-compliant final pay timing for seasonal separations
Stay In Compliance Throughout Your Busy Seasons
Seasonal flexibility is a real advantage for WNC tourism businesses – but only if payroll and HR compliance flex along with your employment numbers. Check out the Wage & Hour Risk Assessment Worksheet to self-check your current risk areas and talk with Platinum Group before your next hiring ramp-up.
Platinum Group provides cloud HR, payroll, and accounting services to Asheville, Western North Carolina, and businesses across the 48 contiguous United States. As an isolved Network Partner, Platinum Group pairs local, personal service with enterprise-grade HCM technology.
[DISCLAIMER: The information in this article is provided for general informational and educational purposes only and does not constitute legal, tax, or professional advice of any kind. Employment laws and regulations — at the federal, North Carolina, and local level — change frequently, and their application depends on the specific facts of your business. Nothing in this post should be relied upon as a substitute for advice from a licensed attorney or qualified HR professional familiar with your situation. Reading or using this content does not create an attorney-client relationship, an advisory relationship, or any other professional relationship between you and Platinum Group. We make reasonable efforts to keep this information current and accurate but make no representations or warranties, express or implied, about its completeness, accuracy, reliability, or applicability to your circumstances. Platinum Group and its employees, officers, and affiliates disclaim any and all liability for actions taken, or not taken, based on the contents of this article. Before implementing, revising, or relying on any employee handbook or workplace policy, consult a licensed employment attorney.]
