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Employment relationship

State-specific laws What state-specific laws govern the employment relationship? Most of Georgia’s employment laws are contained in Title 34 (Labor and Industrial Relations) of the Official Code of Georgia Annotated, which includes:

  • minimum wage laws (Chapter 4);
  • sex discrimination in employment laws (Chapter 5);
  • employment security laws (Chapter 8); and
  • workers’ compensation laws (Chapter 9).

Georgia’s statutory contract rules also affect many areas of the employment relationship and can be found in Title 13 (Contracts) of the code. Further, Georgia’s Restrictive Covenants Act can be found in Chapter 4 of Title 13 (courts will still analyze restrictive covenants executed before May 2011 under the standard used before the new legislation).

State public sector employment is also addressed in Title 45 (Public Officers and Employees) of the code.

Who do these cover, including categories of workers? Employers should consult each statute to determine whether their contractors, employees, interns, or volunteers are covered. Even within Title 34, there is no uniform definition for “employer” or “employee”. Some statutes, such as Georgia’s Age Discrimination Statute, apply to all employees (see O.C.G.A. § 34-1-2). In contrast, the state’s Disability Discrimination Statute applies only to employers with 15 or more employees. Further, Georgia’s Minimum Wage Law does not apply to any employee who is covered by the federal Fair Labor Standards Act and contains multiple exceptions based on the type of employee or size of the employer.

Misclassification Are there state-specific rules regarding employee/contractor misclassification? Georgia courts ordinarily apply the “control” test to determine whether an individual is an employee or independent contractor, and multiple cases have cited and applied the factors contained in the Restatement of Agency 2d § 220(2) (see Murphy v. Blue Bird Body Co., 207 Ga. App. 853, 854-55, 429 S.E.2d 530, 532 (1993)). These factors include:

  • the extent of control which, by agreement, the master may exercise over the details of the work;
  • whether the employee is engaged in a distinct occupation or business;
  • the kind of occupation, with reference to whether the work is usually carried out in the locality under the direction of the employer or by a specialist without supervision;
  • the skill required in the particular occupation;
  • whether the employer or workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
  • the length of time for which the person is employed;
  • the method of payment, whether by time or by the job;
  • whether the work is a part of the employer’s regular business;
  • whether the parties believe that they are creating a master-servant relationship; and
  • whether the principal is or is not in business (restatement (Second) of Agency § 220 (1958)).

Georgia’s workers’ compensation statutes and employment security rules also contain guidance for classifying employees and independent contractors for their respective purposes.

Contracts Must an employment contract be in writing? No, an employment contract need not be in writing. However, contracts for a definite period exceeding one year may be subject to the Statute of Frauds, which requires a written agreement.

Are any terms implied into employment contracts? All employers have the duty to exercise ordinary care to provide safe working conditions and to do those things that are reasonably necessary to protect their employees (see O.C.G.A. § 34-2-10). In Georgia, parties to a contract also have an implied duty of good faith and fair dealing.

Are mandatory arbitration agreements enforceable? With limited exceptions, mandatory arbitration agreements are enforceable under Georgia law (see O.C.G.A. § 9-9-2). However, if the arbitration agreement is a clause contained in the employment agreement, the parties must initial that clause when executing the agreement. Nevertheless, this request has been held to be pre-empted by the Federal Arbitration Act and is inapplicable to arbitration agreements governed by that act.

How can employers make changes to existing employment agreements? Employers can modify employment agreements in compliance with the normal rules of contract law (e.g., with the employee’s agreement or through a method described in the agreement itself). However, when changing the terms in a written employment contract that is not terminable at will by the employer, there must be new consideration given in exchange for the modification.

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