GEORGIA: An Introduction to Labor & Employment
Significant Changes to the 2024 Legal Landscape
Several proposed rules could significantly change the 2024 legal landscape for Georgia employers, resulting in increased operating costs, litigation, and limitations on the options employers have to protect their client base and confidential business information. One issue being watched closely is the possibility that Georgia’s restrictive covenant law may be undermined entirely depending on a ruling by the Federal Trade Commission. Georgia employers could also face considerable challenges if a proposed federal rule is enacted that would markedly change the minimum wage and overtime exemption requirements for certain employees despite the lack of any state-specific laws in Georgia regarding exemptions.
Georgia employers with remote and hybrid workforces are also potentially at risk for substantial monetary penalties and increased litigation if they fail to comply with rapidly changing state and local laws in the domicile where remote workers sit. Some of these laws are already in place, and several are expected to become effective this year. The requirements imposed by these laws, along with challenges pertaining to return-to-office requirements and increased accommodation requests, create a number of legal landmines that employers must navigate carefully.
Highlighted below are several of the more pressing issues about which employers should be aware. The constantly shifting legal landscape of employment law will make it even more imperative that employers remain vigilant in staying informed of state and nationwide developments impacting their workforces.
Restrictive Covenants
Potential threats to the application of the Georgia Restrictive Covenant Act continue, which could render non-competes and similar restrictive covenants more difficult to enforce or unenforceable altogether. This year, a final ruling on the Federal Trade Commission’s (FTC) proposed rule that would prohibit employers from entering into or maintaining non-compete agreements with workers is expected. Non-Compete Clause Rule, 88 Fed. Reg. 3482-01 (Jan. 19, 2023) (to be codified at 16 C.F.R. § 910.2(b)(1)). While the final rule may differ from the proposed rule and would be subject to challenges in court, the rule would take effect unless or until it is enjoined and could render any non-compete agreements unenforceable.
The National Labor Relations Board’s General Counsel also issued a memorandum signaling that employers may violate the National Labor Relations Act by proffering or maintaining non-compete agreements with employees subject to Section 7 of the NLRA. Nat’l Lab. Rels. Bd., Memorandum (GC 23-08) on Non-Compete Agreements that Violate the National Labor Relations Act (May 30, 2023), https://apps.nlrb.gov/link/document.aspx/09031d4583a87168. Congress has also introduced the Workforce Mobility Act of 2023, which would prohibit the formation or enforcement of non-compete agreements except in the sale of a business or when a partner leaves a partnership enterprise. H.R. 731, 118th Cong. (2023). These developments may significantly limit an employer's ability to rely on non-compete agreements.
The Georgia Court of Appeals has also weighed in on the enforceability of an employee non-solicitation covenant and held that a territorial limitation is required to enforce an employee non-solicitation covenant. North American Senior Benefits, LLC v. Wimmer, 2023 WL 3963931 (Ga Ct. App. June 13, 2023). The Georgia Supreme Court agreed to review the decision, but if upheld, employee non-solicitation covenants would also become more challenging to enforce in Georgia.
Given the potential shift in enforcement, employers should begin considering alternative tools, such as agreements to protect the confidentiality of trade secrets or sensitive business information and policies designed to encourage maintaining key client relationships among multiple employees to reduce the risk of losing clients when one employee separates.
Minimum Wage and Overtime
The United States Department of Labor has proposed a rule that would significantly raise the salary threshold that executive, administrative, and professional employees (“EAPs”) and highly compensated employees (“HCEs”) must satisfy to be exempt from the Fair Labor Standards Act minimum wage and overtime requirements. Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, 88 Fed. Reg. 62152 (Sept. 8, 2023). This could significantly affect Georgia employers’ operational costs and increase the risk of litigation related to noncompliance.
Under the current rules, EAPs may be classified as exempt if they are paid USD684 per week or USD35,568 per year (provided they meet the other requirements to be classified as exempt), and HCEs may be classified as exempt if they are paid USD107,432 per year. If the proposed rule is implemented, these amounts would be raised approximately 55% for EAPs (to USD1,059 per week or USD55,068 per year) and approximately 34% for HCEs (to USD143,988). The Department of Labor estimates approximately 3.4 million Americans would be affected by these changes. Georgia employers should closely monitor developments.
Leave Requirements
While no state law in Georgia requires private employers to provide employees with paid time off, paid leave laws became effective in other states (including Illinois and Minnesota) in 2024. Georgia employers with employees in these states and other states with similar laws risk monetary penalties if they do not comply.
These laws generally set forth a minimum amount of paid leave to which an employee is entitled, with other requirements varying from state to state. Illinois also now prohibits employers from requiring workers to provide a basis for their time off request. Paid Leave for All Workers Act, 820 ILCS 192 (Jan. 1, 2024). These states and others also enacted laws that expand unpaid leave. For example, in Illinois, employers are now required to provide unpaid leave to employees grieving a family or household member killed in a crime of violence. Victims’ Economic Security and Safety Act, Public Act 103-0314 (Jan. 1, 2024). Even though similar laws do not currently exist in Georgia, Georgia employers should closely monitor the rapidly changing landscape of leave requirements in states where any employee resides.
Pay Transparency and Pay Equity
Although Georgia has yet to implement pay transparency laws, these laws are becoming more common in other states. Georgia employers who advertise remote jobs that could be performed anywhere should closely monitor these laws to ensure those job postings comply with the requirements.
States with pay transparency laws already in place, which generally require employers to provide salary information in job postings and, in some states, benefits information, include Washington, Rhode Island, Nevada, New York, Hawaii, Maryland, Connecticut, Colorado, and California. Pay transparency legislation is also pending in other states, including New Jersey and Massachusetts, and a pay transparency law will go into effect in Illinois in 2025. Georgia employers risk significant monetary penalties if job postings for remote jobs that could be performed in any state do not comply with pay transparency laws in other states.
Return to Office Requirements
Many employers are encouraging or requiring employees to return to the office, and while these requirements are generally permissible, employers should expect remote work accommodation requests to increase. Missteps in handling these requests expose employers to liability, and these requests may be particularly challenging for employers with a hybrid workforce and those with employees in other states who work remotely.
When imposing in-person attendance requirements, employers should be prepared to articulate why in-person attendance is an essential function of a particular employee’s job. Updating job descriptions to reflect the importance of in-person attendance can help support the employer’s position. Still, Georgia employers should carefully consider whether remote work is appropriate for a particular job to avoid conflicts between requiring in-person attendance for employees in Georgia and allowing employees in other states to work remotely.
The risk of unprofessional behavior in the workplace has also increased significantly as more employees have returned to the office after years of remote work. Unprofessional behavior in the workplace is a leading cause of employment litigation, exposing employers to millions of dollars of liability each year. To reduce the risk of liability related to unprofessional behavior, employers should take steps to ensure employees understand the behavioral expectations necessary to create a professional and productive workplace. Training that reminds employees of appropriate workplace behavior can be an invaluable tool to achieve this goal.
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The developments discussed in this summary are simply an overview of issues impacting Georgia employers. Employers in the state should take steps to comply with all laws applicable to their workforces while remaining attentive to additional laws that may impact their workforces.