With the summer approaching quickly, many “seasonal” businesses such as tennis clubs, golf courses, outdoor restaurants, etc., are faced with the reality of the need to obtain staffing in order to meet the business' need. Many businesses are preparing to handle the increased volume by hiring students on summer break, many of whom will work long hours before the season ends. Due to the seasonal nature of these workers, many employers are lax in terms of complying with Federal and State labor laws, including wage and hour laws. Indeed, it is often the case that these employees are paid “off the books” or “under the table” or not properly compensated for hours worked, including overtime.
Some employers may be relying on the so-called “seasonal exemption,” assuming that summer employees are exempt from minimum wage and overtime. Unfortunately, simply having a seasonal business is not enough to qualify for the seasonal exemption. There are specific federal and state requirements that must both be satisfied before a summer employee will be considered exempt from wage and hour requirements. Moreover, employers who do not meet these requirements, and who fail to pay minimum wage and/or overtime to summer employees, can be subject to steep penalties including double or triple damages and mandatory attorneys' fees.
The Fair Labor Standards Act (“FLSA”) is the federal law that governs employee wages. The FLSA requires that most employees be paid at least the federal minimum wage ($7.25/hour) and be paid overtime (at least 150% of the regular rate of pay) for all hours worked over forty (40) hours per work week. Importantly, the FLSA establishes the minimum that an employee must be paid (subject to certain exceptions), it does not prohibit individual states from establishing a minimum which is higher. In New Jersey, the current minimum wage is $8.44/hour (subject to certain exceptions).
The FLSA does contain an exemption for seasonal employees, working at an “amusement or recreational establishment, organized camp, or religious or non-profit educational conference center” so long as (a) the employer does not operate for more than seven (7) months in any calendar year, or (b) during the preceding calendar year, the employer's average receipts for any six (6) months of such year were not more than 33% of its average receipts for the other six (6) months of such year. The U.S. Department of Labor has opined that “amusement or recreational establishments” include, without limitation: beaches, golf courses, swimming pools, boardwalks, stadiums, summer camps, ice skating rinks, and zoos. Similarly, New Jersey has established laws and regulations that govern the number of hours worked, wages paid and exceptions to those laws and regulations.
Simply appearing at first blush to meet the definition of a seasonal employee should not give you peace of mind as there are many exceptions to the exceptions. As a result, if you are an employer, you should always contact your legal counsel before making a determination as to the employment status of your employees.