Seasonal working is not just an issue at this time of year - many businesses take on additional staff for leisure activities in the summer or for seasonal agricultural work in the autumn. However, for retailers especially, Christmas can see an increase of up to 60% in staffing numbers for as little as 6-8 weeks. There are a number of key steps to take to make sure that the seasonal workers are paid correctly, on time, and with the minimum of stress to the business.

Liz Hughes, director of payroll services for outsourced payroll specialists Moorepay, provides some step-by-step advice on managing the payroll function through the hectic festive season.

1. Plan ahead. Allow a lot of time to recruit the right people fairly, especially if external employment checks are needed - for example if the employees will be working with children. Build in sufficient time to train workers, or at least to acclimatise them, and make sure that necessary equipment, as well as any uniforms, is ordered well in advance. Make sure you learn from any problems you've had in previous years.
   
   
2. Do things properly. Use a good short-term contract that has been updated from the previous year by a good employment lawyer. There are a number of changes each year to employment legislation and taxation that need to be noted. For example, temporary workers are now entitled to holidays and holiday pay. Recruiters also need to be trained in equal opportunities legislation - including religion and sexual orientation.
   
   
3. Gather information once. It really can speed up the process of entering new employees into payroll systems if you use a single form to collect both HR and payroll data. Ask employees for NI numbers, P45/46 or proof of student status early on in the recruitment process alongside their proof of ability to work. Don't wait until the first day of work.
   
   
4. Be realistic. Make sure that temporary employees know how the payroll system works and when they can expect to get their first pay cheque. The payroll run will take place 2-3 days before people are paid, and it may take up to 5 weeks to pay someone if a monthly payroll is used.
   
   
5. Test your systems. Particularly if you've had a new system or an upgrade installed recently, test that it can handle the numbers of temporary staff you need as well as any special cases such as students. Don't forget the obvious issues such as having sufficient payroll stationery.
   
   
6. Get ready for weekly payments. 85% of seasonal staff are paid weekly. As well as making sure that your payroll systems can handle this, you need to be able to handle the volume of payments - and the attached costs of transferring the money to their banks, or handling four times as much cash.
   
   
7. Check you have the people resources in your payroll team. You need to think through the extra demands that registering lots of new people and weekly payrolls will put on the payroll system. Temporary payroll staff are difficult to find and expensive at short notice, and will need to learn your specific operating procedures. One of the problems with payroll is that when things go wrong, the workload spirals upwards. If you are using an outsourced provider, they will have more resources available, but you should give them sufficient notice.
   
   
8. Be careful when offering up-front cash 'floats'. If you overpay permanent employees you can reclaim the money from them fairly easily - for seasonal staff it can be uneconomic, especially if the individual moves location as well as job at the end of their contract.
   
   
9. Learn from your actions. Don't just breathe a sigh of relief in the New Year - see what improvements can be made for the future.

Liz Hughes is director of payroll services for outsourced payroll specialists Moorepay (www.moorepay.co.uk)