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By Laurie Nooren, SPHR, PHRca, SHRM-CP

Do you have temporary, seasonal, part-time, on-call, inactive or “as needed” employees on your payroll?  We will often ask clients “how many employees do you have?” This question is asked to determine which employment laws an employer might be subject to.   The response we usually receive is the number of “active” or “regular” employees that are working and being paid on a regular basis.  The employees usually forgotten in this number are the ones who are not working on a regular basis and/or those who have not been terminated in payroll.

Why does this matter? California has several employment laws which apply based on the size of the employer.  And, to further complicate matters, comparing employment laws is not an apples to apples comparison.  Certain laws may include independent contractors or not, part-time employees or not, full-time equivalents, or employees on a leave of absence, in the total employee count. 

Some employment laws even have differing definitions of what constitutes an “employee.”  For example, the California Labor Code defines what constitutes an employee as “every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed.” However, for the Pay Data Reporting law (for employers with 100 or more employees), Government Code section 12999(k)(1) defines “employee” to mean “an individual on an employer’s payroll, including a part-time individual, and for whom the employer is required to withhold federal social security taxes from that individual’s wages.”  On the other hand, the Family Medical Leave Act (FMLA), which applies to all employers with 50 or more employees on payroll in 20 calendar weeks of the current or previous calendar year defines employee very simply as “any individual employed by an employer.”   

And the list continues.  Here are a few other laws where the number of employees on an employer’s payroll must be considered: California Family Rights Act (CFRA) (5 or more employees), Organ and Bone Marrow Donor leave (15 or more employees), School Activities Leave (25 or more employees), and California Family Military Leave (25 or more employees. Employers may be subject to some or all of these, depending on their size, the law, and the employee definition.

We recommend employers perform an analysis to determine how many actual employees are on payroll (who have not been terminated).  Is it anticipated these employees will continue to work for you?  If so, leaving them on payroll may make sense.  However, if they will only work for you once or twice a year for a few hours or days, or haven’t worked for you for several months, and you’re not sure if they will again, we suggest removing them from your payroll.  Removing employees from payroll who are not regularly working will ensure your employee count is accurate.

Caveat – please be cognizant of employees currently on a leave of absence.  Terminating employees who are on protected leave, or without providing proper separation paperwork, could lead you into some troubled waters.  

In closing, if an employee has only worked a few hours/days for you several years ago and hasn’t worked since, and you’ve kept them on payroll “just in case,” it’s probably time to cut that cord.  If they ever do come back and work for you again you will need to have the employee complete new hire paperwork.  Redoing new hire paperwork is a minor inconvenience compared to being subjected to laws which are really meant for larger employers.  Why worry about laws that don’t apply to you?

This guidance is not to be considered legal advice, as we are not lawyers.  As always, contact your favorite Silvers HR consultant to think out loud if you have additional questions.