Employers face a number of issues related to the hiring and firing of employees. It is essential for business owners to establish well-defined policies in order to avoid future employment related disputes and to take the necessary precautions to protect their business’s proprietary information.

A common error amongst new businesses is to hire employees before establishing their basic employment policies and related documents. Every employer should have an employee handbook that sets forth the policies, procedures, and philosophies of the business. It also expresses the type of conduct expected of the employees and the consequences for failing to adhere to such standards.

The handbook should be prepared in light of the company’s own vision, culture, and unique environment. On the other hand, employers should be careful not to over commit themselves and thereby set up greater expectations for employees than they are ready—or able—to meet.

Hiring independent contractors rather than employees can have significant benefits for an employer. For instance, the employer is not responsible for federal or state withholding, employment taxes, or ERISA benefits. The employer may also be able to avoid unemployment claims or certain claims of discrimination.

To ensure that an individual is properly classified as an independent contractor, there are numerous factors that an employer must consider primarily concerning the degree of control over the manner in which the individual conducts his/her work, the degree of economic and financial control over the individual, and whether the individual is conducting separate business for other businesses.

It is extremely important for employers to properly classify an individual as a independent contractor because improper classification can have substantial negative consequences for failing to adhere to the proper state and federal laws on employee benefits, taxes, and other regulations.

All international workers must obtain permission before they can legally work in the United States. Each employment category has specific requirements, conditions, and authorized periods of stay. Employers are required to verify that any individual seeking employment with their company is authorized to work in the United States. Depending on the potential employee’s immigrant status, the employer may be required to petition on his/her behalf before they can lawfully begin working in the country. There may also be special tax withholding rules for employers with certain foreign employees.

Hiring employees is an expensive investment—especially for small businesses. With half of all hourly workers leaving new jobs within the first 120 days, and half of external hires in senior positions leaving within 18 months, effective recruitment and selection is absolutely essential.

Once the right candidate is selected, an effective onboarding process can make an enormous difference with keeping the turnover rate as low as possible. The onboarding process teaches new employees about your company, the policies, procedures, job requirements, and expectations.

Some things to include in your onboarding plan are:

  • Employees name and social security number
  • Work authorization number (USCIS Form I-9)
  • Income tax withholding information (IRS Form W-4)
  • Benefits
  • Payroll deductions
  • Company organizational structure
  • Company values
  • Expected attitudes and behaviors
  • Policies and procedures
  • Job requirements
  • Performance measurement and management

The federal government requires most U.S. employers to give at least 60 days notice prior to any mass layoffs in their company. The Worker Adjustment and Retraining Notification (WARN) Act sets forth these requirements and is enforced by the U.S. Department of Labor Employment and Training Administration. The purpose of WARN is to give workers and their families fair notice in order to transition into a new job or seek necessary training in order to new obtain new work.

The WARN Act applies to employers with more than 100 full-time workers (i.e., not including workers who worked less than 6 months in the last 12 months, or work less than 20 hours per week), and are a for-profit business, a private non-profit organization, or a quasi-public entity.

An employer is liable to all affected employees if it violates the notice requirement of the WARN Act. The penalty imposed is an amount equal to back pay and benefits for the period of violation, up to 60 days. The penalty is offset by any amount paid to the employees over the notice period.

There are no additional requirements under Georgia statutes apart from those found in the WARN Act.

Georgia employers are not required to provide employees with vacation leave—whether paid or unpaid. An employer may nevertheless choose to offer vacation leave by establishing a company-wide policy or including it in the terms of an employee’s employment contract. Employers wishing to offer vacation leave should carefully draft the terms of their policy because, once offered, employers must adhere to the terms established. Moreover, depending on the language employees may be entitled to payment for accrued vacation when the leave the job.

Under Georgia law, employers are not required to offer sick leave—whether paid or unpaid. Employers may voluntarily offer such benefits through a company-wide policy or through an employee’s employment contract. Although Georgia does not have a state law requiring employers to offer sick leave, federal law may still apply to certain employers.

The Family and Medical Leave Act (FMLA) requires Georgia employers with 50 or more employees to offer up to 12 weeks of unpaid leave to qualifying employees for health issues related to:

  • The birth and care of the employee’s child, or placement for adoption or foster care of a child with the employee;
  • The care of an immediate family members with a serious health condition; or
  • The employee’s own serious health condition(s);

To be eligible for unpaid leave under FMLA, the employee must have:

  • Worked at least 12 months for the employer; and
  • Worked at least 1,250 hours during the 12 months immediately preceding the date FMLA leave begins;

Additional provisions apply to families of Armed Service men and women under the newly-enacted National Defense Authorization Act.

Private employers in Georgia are not required to offer employees holiday leave—whether paid or unpaid. Employers may also require employees to work on holidays and, unlike other states, do not have to pay the employee a premium rate for their time. Similar to other types of leave, Georgia employers may nevertheless offer holiday leave through a company-wide policy or employment contract.

The Fair Labor Standards Act is a federal law that provides important protection for employees throughout the United States. The FSLA sets rules on the minimum wage, overtime, and age requirements for employers and employees.

Georgia’s current minimum wage is: $5.15. Georgia does not distinguish between tipped and non-tipped employees with regard to its minimum wage laws. The current federal minimum wage for non-tipped employees is: $7.25. For tipped employees, the federal minimum wage is: $2.13.

The FSLA provides certain exemptions that permit employers to avoid the mandates within the FSLA. Two types of exemptions are provided: (1) an exemption on both the minimum wage and overtime requirements, and (2) an exemption only on the overtime requirements. Whether an employee is exempt can be a hotly contested issue and, if improperly classified, may subject an employer to criminal prosecution and fines up to $10,000. Needless to say, it is therefore very important for employers to have a thorough understanding of the requirements set forth in the FSLA.

The most common categories of employees exempt from both the minimum wage and overtime requirements are:

  • Administrative employees
  • Computer employees
  • Executive employees
  • Highly compensated employees
  • Creative professional employees
  • Learned professional employees
  • Teaching professional employees
  • Outside salespersons

The most common categories of employees exempt from both the minimum wage and overtime requirements are:

  • Motor carrier employees
  • Rail carrier employees
  • Employees subject to the Railway Labor Act
  • Outside dairy buyers
  • Seaman
  • Local radio and television station employees
  • Motor vehicle dealership employees
  • Watercraft salesman employees
  • Local delivery drivers and drivers’ assistants
  • Agricultural water access workers
  • Livestock auction workers
  • County elevator workers
  • Produce workers
  • Taxicab drivers
  • Law enforcement officers
  • Firefighters
  • Nonprofit educational institution employees
  • Movie theater employees
  • Forestry or lumbering operation employees
  • Amusement or recreational establishment employees

If an employer requires an employee to work more than 40 hours in a workweek, the employer must pay the employee one and half times his/her’s regular rate for any time in excess of 40 hours.

When hiring or in the course of employment, Federal and other Georgia laws prohibit discrimination on the basis of:

  • Age
  • Disability
  • Unequal pay based on gender
  • Pregnancy
  • Race, color, religion, sex or national origin
  • Retaliation
  • Sexual orientation
  • Genetic information

Employers with at least 15 employees are covered under the applicable federal and state laws regarding discrimination. Criminal charges and fines may be imposed on employers in violation of such laws.

Georgia employers with three or more employees are required to provide workers’ compensation coverage for their employees. Coverage is provided regardless of whether the employee is at fault for their injuries. As long as the employee was hurt while on the job and acting within the scope of their duties at the time they were injured, the employee is entitled to workers’ compensation coverage. In exchange for this no-fault guarantee, however, an employee is precluded from suing the employer for damages as a result of the employee’s injuries.

The Patient Protection and Affordable Care Act of 2010 requires employers with at least 50 full-time employees to provide affordable health insurance to their workers. Penalties will be imposed on employers who fail to provide such health care.