As Pennsylvania’s fields burst into activity for peak agriculture season, farmers and agribusiness owners face various challenges: managing harvest schedules, maintaining equipment, ensuring compliance with labor laws, and handling seasonal payroll.
With the influx of temporary and seasonal workers, payroll management can become incredibly complex. At PaySmart, we understand the unique needs of agriculture businesses during this time of year.
Here are eight key seasonal payroll tips that small businesses in Central PA can access:
1. Small business owners in Central PA should understand Agricultural Payroll Exemptions and Requirements
Agriculture businesses in PA operate under a unique set of labor laws that can differ significantly from those in other industries. Certain agricultural employees may be exempt from standard overtime requirements in Pennsylvania under federal and state law. However, it’s critical to know when these exemptions apply.
Key Considerations:
- Under the Fair Labor Standards Act (FLSA), agricultural employees are generally exempt from overtime, but not all positions qualify. For example, packinghouse workers or those processing agricultural products may not be exempt.
- Pennsylvania’s Minimum Wage Act aligns with federal guidelines, but it’s always best to double-check how changes in employment law may impact your payroll obligations.
Tip: Work with a payroll provider based in PA who is familiar with agri-business regulations and specializes in small businesses.
2. Small businesses in PA should use Seasonal Hiring Forms correctly
Many agribusinesses rely on temporary or seasonal workers in Pennsylvania during peak seasons. Increasing your ability to ensure that proper documentation is collected and filed is essential for compliance and a smooth onboarding process.
Must-have forms include:
- Form W-4 (Employee’s Withholding Certificate)
- Form I-9 (Employment Eligibility Verification)
- Any relevant state tax withholding forms
Additional documentation and reporting requirements apply to migrant workers or those under H-2A visas (Temporary Agricultural Workers).
Tip: Create a seasonal onboarding packet and checklist to standardize the process and ensure all documents are collected before the first paycheck. PaySmart is an excellent resource for preparing for the season.
3. Leverage the expertise of a local payroll provider in Pennsylvania for Variable Hours and Piece Rates
Agriculture payroll often involves variable hours and piece-rate pay systems, where workers are compensated based on units harvested, acres plowed, or other metrics. Calculating this manually as the season ramps up can be difficult. Working with an experienced payroll provider can help small business owners gain the knowledge they need to succeed in the upcoming season.
Solutions:
- Ensure that wage calculations comply with minimum wage laws when averaged over time worked.
- Track all hours worked, even for piece-rate employees, to ensure compliance and provide clear records.
Tip: A local payroll provider like PaySmart can support you by providing options to track time for accuracy and decrease some frustrations you may face with payroll during your peak season.
4. Increase your knowledge of payroll obligations and ensure this includes H-2A workers
H-2A workers are familiar with Pennsylvania’s agricultural sector. Payroll for these workers comes with distinct tax implications.
H-2A worker payroll facts:
- Employers are not required to withhold Social Security, Medicare, or federal unemployment (FUTA) taxes for H-2A workers.
- However, you must still file Form W-2 for these employees, not Form 1099.
- State tax requirements may vary, so reviewing Pennsylvania-specific guidelines is essential.
Tip: Work with a payroll professional in Central PA who understands the nuances of foreign agricultural labor programs to ensure proper tax treatment and avoid penalties.
5. Keep good records to prepare in case of an audit
Ag businesses may be subject to Department of Labor (DOL) or IRS audits, especially if they employ large numbers of seasonal workers or participate in federal visa programs.
Ensure you have:
- Detailed time records for all workers
- Accurate pay stubs and withholding documentation
- Copies of onboarding paperwork and employee classifications
- Proof of wage compliance, especially for minor workers or visa holders
Tip: Digitize records and store them securely. A payroll provider like PaySmart can help ensure records are accurate, complete, and quickly retrieved if needed.
6. Stay on Top of Pay Frequency and Final Pay Laws
While some flexibility exists for agricultural employers, you must still follow Pennsylvania’s pay frequency rules. Employees in Pennsylvania must be paid at least semi-monthly, and final wages must be paid by the next regular payday after separation.
Tip: Set up a regular payroll schedule before your hiring push. Communicating it clearly to all seasonal workers may help ease any miscommunications or disputes during your busy season.
7. Have a plan for addressing check cashing and replacement checks
Seasonal workers may come and go quickly. Some workers may not have established relationships with a bank account, making direct deposit challenging. Employers may want to consider establishing a relationship with a local bank or banker to make referrals as part of the onboarding process to reduce problems with direct deposit or lost checks in the future.
Benefits include:
- Reduce administrative hassles
- Improved satisfaction for seasonal staff
Tip: Have applications to local banks or credit unions handy.
8. Plan for Offboarding and Year-End Filing
Once the season wraps up, there’s still work to be done. Prepare for offboarding by collecting any remaining documentation and ensuring final paychecks are processed correctly. Start organizing your payroll records for year-end reporting.
Checklist for post-season payroll:
- Process final pay and unused time-off payouts if applicable
- Update employee records (terminations, address changes, etc.)
- Begin preparing W-2s and state wage reports
Tip: Schedule a year-end payroll review with your local payroll provider to ensure you’re on track and identify ways to improve processes, decrease administrative time, and ensure next season is a success!
Simplify Seasonal Payroll with PaySmart
At PaySmart, we specialize in helping Pennsylvania’s small businesses, including farms and agriculture operations, navigate the complexities of seasonal payroll. From employee onboarding to payroll tax filing, we offer customizable payroll solutions designed to grow with your business and its ongoing needs.
PaySmart is a payroll provider in Mechanicsburg, Pennsylvania, supporting small businesses in the Central PA region. We are dedicated to helping small businesses take care of their payroll needs. To learn more about how PaySmart may provide payroll solutions, please get in touch with us at 717-766-1777. Our New Client Concierge is waiting for you!