June 2022: New Georgia Employment Laws Change Definition of Employment, Restrict Local Laws Regulating Work Hours

Update Applicable to:
All employers in the state of Georgia.

What happened?
On May 2 and May 5, 2022, Governor Kemp signed Act 809 and Act 823 into law, which alters the definition of employment for purposes of unemployment benefits and precludes local governments from regulating the scheduling or work hours of a private business’s employees.

What are the details?

Act 809: Classification of Employees for Unemployment Benefit Purposes
Effective July 1, 2022, Act 809will expand the types of workers who may be able to claim unemployment benefits. It also ensures, however, that the nature of an individual’s work will ultimately determine the existence of an employer-employee relationship.

In Georgia, only individuals who are deemed “employees” may be eligible for unemployment benefits. Independent contractors are not entitled to such benefits. Act 809changes the definition of employment to include any services performed by an individual for wages. Under this definition, the majority of workers would qualify as “employees,” unless the Georgia Department of Labor makes a contrary determination. Based on Act 809’s expanded definition of employment, more workers may be able to obtain unemployment benefits from a business.

Under the new law, an individual will not qualify as an “employee” only if it is shown that the individual is free from control or direction over the performance of services for a company and is customarily engaged in an independent trade, occupation, profession, or business. The following seven factors are to be considered in making this determination:

• Ability to work for other companies or holding other employment at the same time;
• Freedom to accept or reject work assignments without consequence;
• Lack of a minimum number of hours to work or orders to be obtained;
• Ability to set their own work schedule;
• Lack of oversight or instructions concerning the services to be performed;
• Absence of territorial or geographic restrictions; and
• Lack of a requirement to perform, behave, or act in a certain manner related to the performance of services.

For Georgia businesses now, a worker’s classification as an “employee” or an “independent contractor” is more crucial than ever. Act 809 creates an enforcement mechanism by implementing a civil penalty, paid to the Georgia Department of Labor if a business incorrectly classifies its workers. Under the new law, the Commissioner sets the amount of the civil penalty by evaluating the number of individuals who were improperly classified and the frequency of misclassifications.

Act 823: Preemption of Local Governments from Enacting Certain Laws

Effective May 5, 2022, Act 823 precludes local governments from enacting laws regulating work hours, scheduling, or employee output of private businesses.

Act 823 amends existing law to prohibit local governments from enacting laws applicable to private employers that would govern work hours, scheduling, and employee output.

For more information, please see the links below:

Act 809

Act 823

Article

What do employers need to do?
Employers should review the links provided above and ensure that their workers are classified correctly so that they are in compliance with the law.