Georgia Governor Nathan Deal has signed into law a measure preempting any local wage laws or requirements that employers compensate employees for changes related to employee schedules. Act 221 (H.B. 243) continues Georgia’s tradition of promoting an employer-friendly environment, particularly for retail businesses and restaurants.

A second measure, Act 203 (S.B. 201), signed by the governor states that if an employer elects to provide its employees with paid sick leave, the employer must permit employees to use up to five days of the sick leave for the care of family members.

Both laws become effective on July 1, 2017.

On Call Scheduling

The new law protects businesses that want to use the practice of “on call” or “predictive” scheduling by barring local governments from requiring additional pay for scheduling changes. The effect of this is to protect the practice of “on call” and “predictive” scheduling.

Act 221 is Georgia’s most recent attempt to draw to the state businesses looking for a break from more restrictive state and local wage laws in other jurisdictions. Existing Georgia law bars cities and counties from adopting minimum wage rates higher than the federal minimum wage, currently $7.25 an hour, or requiring overtime pay not required by federal law. Existing Georgia law also bars any local government entity from requiring employers to offer employee benefits (including health insurance).

“On call scheduling” practices keep employees “on call.” Employers would inform employees, sometimes just hours before the scheduled work time, whether they must report to work. “Predictive scheduling” mandates usually include “predictive pay” provisions, which obligate employers to pay employees for shift changes and cancelled shifts. They also require payment to employees who were “on-call,” but not called into work on a given day.

These practices are common in the retail and restaurant industries. They allow employers the flexibility to adjust their staffing levels with short notice based on customer demand. Both are good examples of companies taking advantage of predictive modeling and analytic technology to forecast customer demand in real time to save labor costs.

They are controversial, however, because employees must keep themselves available to work, but are not paid for the shifts they ultimately are not required to work, with little notice. Employees may be forced to make last-minute adjustments in child care and transportation and may be kept from taking other work. In 2016, many state attorneys general began looking into the practice, resulting in a December 2016 agreement adopted by 21 national retailers agreeing not to use the practice of “on call scheduling” in those states. Those states include California, Connecticut, Illinois, Maryland, Massachusetts, Minnesota, New York, Rhode Island, and Washington, D.C. In addition, the cities of San Francisco and Seattle adopted laws requiring employers to pay employees when their shifts were changed or cancelled without sufficient notice.

With the new law, Governor Deal and the state legislature are ensuring that such laws are not planted in the Peach State. The law is a clear effort by Georgia to differentiate itself from other states that penalized or banned these practices, which are becoming more common in retail and restaurant settings.

Sick Leave

The new law requires employers that elect to offer paid sick leave to their employees to permit eligible employees to use up to five days of paid leave each year to care for immediate family members.

Act 203, however, has limited application. It does not apply:

  • to employees working less than 30 hours per week; or
  • to employers with fewer than 25 employees.

Significantly, Act 203 does not require employers to adopt any paid leave policies at all or to pay out unused paid leave time upon separation (continuing a “use-it-or-lose-it” approach). It also does not provide a private cause of action against employers that do not comply with the law.

Georgia employers with paid leave policies should adjust them accordingly. These and similar paid leave law measures are being adopted by other states feeling competitive pressure to provide protected paid leave to employees.