Better Watch Out: How to Avoid Holiday Hiring Pitfalls

For retailers and other employers that need to add workers to handle a seasonal surge in business, the most wonderful time of the year can seem like a nightmare.

Each year, thousands of employers struggle to meet the increased demands of the holiday season. These demands are felt most strongly by retailers, who need more bodies to ring up extra shoppers and restock rapidly depleting shelves. Restaurants may also struggle as their regular staff takes time off and more people eat out.

And with unemployment at a lower rate entering this holiday season than it’s been in more than a decade, employers looking for temporary help may feel the crunch more than usual this year.

“There are hundreds of thousands in our holiday season in the U.S. that are hired … in retail and retail support businesses,” Morgan Lewis & Bockius LLP employment partner Carrie Gonell told Law360. “They’re having a hard time, already, locating those folks.”

One option for businesses facing seasonal challenges is to spread extra hours among existing workers. But this solution to potential recruiting challenges can be costly, as regular employees may rack up a lot of overtime hours between November and December, and some employers may just not have enough workers to meet demand.

An employer can solve some of these problems by hiring a staffing company that specializes in their area of need. But this opens its own can of worms, attorneys say, and there are a few things businesses should keep in mind if they take this route.

Staffing companies introduce a host of potential legal and compliance issues, and an employer’s best bet for preventing issues and staving them off if they arise is a strong contract.

Businesses that tap a staffing company will want to keep an especially close eye on these workers, though this can be a double-edged sword, said Epstein Becker Green hospitality team leader Jeffrey Ruzal.

“It supports a theory of joint employment when you have your own supervisors supervising a third-party employee,” Ruzal said. “But without that supervision, you’re definitely at risk for potential wage-and-hour compliance issues, which would cause problems for the employer down the line.”

“You want you have a very ironclad agreement with the vendor that allows there to be representations and warranties that provide for full compliance with wage-and-hour laws,” he added.

A good contract includes provisions ensuring workers do not perform off-the-clock work, that their hours are being properly recorded and that non-overtime exempt workers are paid correctly for every extra hour worked. Employers will also want to make sure that their staffing company agrees to indemnify them in the event of a suit, and that the company has the cash to ensure this agreement is worth more than the paper it’s printed on.

Vetting a staffing company and drafting a strong contract require time, which few employers have with the holidays already here. For this reason, if an employer doesn’t have a relationship with a staffing company before hiring season approaches, it may be best to wait until next year.

“You need to make sure that, way before the season is upon you, you’re already screening that hiring company and you’re comfortable with their practices, because they’ll ultimately become your practices,” said McDonald Carano LLP labor and employment practice group chair Pat Lundvall.

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By Braden Campbell

Law360, New York (November 9, 2017)

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