From JDSupra, Justin Barnes and Saira Shakir discuss a new law that changes the definition of employment for unemployment benefits to make more workers eligible for unemployment benefits. Justin and Saira write:
Georgia Governor Brian Kemp has signed into law two measures addressing the employment relationship. The first, Act 809 (H.B. 389), alters the definition of employment for purposes of unemployment benefits. The second, Act 823 (S.B. 331), precludes local governments from regulating the scheduling or work hours of a private business’s employees.
Act 809: Classification of Employees for Unemployment Benefit Purposes
Act 809 seeks to 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. Act 809 will become effective on July 1, 2022.
In Georgia, only individuals who are deemed “employees” may be eligible for unemployment benefits. Independent contractors are not entitled to such benefits. Act 809 changes 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.
The law also provides specific standards that apply in the context of music industry professionals, ride share network services, and certain delivery 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.
Thus, Georgia businesses must be mindful of the classifications assigned to each of its workers.