Minimum Wage

In Georgia, the minimum wage varies significantly between the public and private sectors. As of now, the minimum gross wage is set at GEL 2,045 per month in the public sector, while the private sector has a much lower minimum wage of GEL 20 per month. This disparity has remained unchanged for several years, reflecting a longstanding issue in wage regulation.

Sector	Minimum Wage (GEL)
Public Sector	2,045
Private Sector	20

Income Tax

Georgia employs a flat personal income tax rate of 20% on all taxable income. This means that regardless of income level, all employees are subject to the same tax rate. Employers are responsible for withholding this tax from employees’ wages and remitting it to the Georgia Department of Revenue.

Tax Type	Rate (%)
Personal Income Tax	20

Payroll Cost

When calculating payroll costs in Georgia, employers need to consider both direct compensation and additional employer contributions. The total payroll cost includes:

• Gross Salary: The agreed-upon salary before any deductions.
• Employer Contributions: Typically around 2% of the employee’s salary for pension contributions.
• Payroll Taxes: Employers must also account for federal taxes and any applicable state unemployment insurance.

For example, if an employee’s gross salary is GEL 1,000:

• Gross Salary: GEL 1,000
• Employer Pension Contribution (2%): GEL 20
• Total Payroll Cost: GEL 1,020

Cost Component	Amount (GEL)
Gross Salary	1,000
Employer Pension Contribution	20
Total Payroll Cost	1,020

Overtime Pay

In Georgia, employees are entitled to overtime pay at a rate of 1.5 times their standard hourly rate for any hours worked beyond the standard 40-hour workweek. This rule applies unless the employee works in an industry that is exempt from this requirement due to a maximum allowed workweek of 48 hours.For instance, if an employee’s standard hourly wage is GEL 10:

• Standard Hourly Rate: GEL 10
• Overtime Rate (1.5x): GEL 15

Pay Type	Rate (GEL)
Standard Hourly Rate	10
Overtime Rate (1.5x)	15

Understanding these components—minimum wage, income tax, payroll costs, and overtime pay—is essential for employers operating in Georgia to ensure compliance with local labor laws and to effectively manage workforce expenses.

Regular & Maximum Working Hours

In Georgia, the standard workweek is capped at 40 hours, typically spread over five days, resulting in a standard workday of 8 hours. However, there are circumstances under which employees can work longer hours. Specifically, businesses with special operating conditions may require a maximum workweek of 48 hours, but this is limited to certain approved industries.For minors aged 16 to 18, the maximum working hours are reduced to 36 hours per week, while those aged 14 to 16 can work a maximum of 24 hours per week. Employers must maintain accurate records of employee work hours for compliance with labor regulations.

Work Type	Standard Hours per Week	Maximum Hours per Week
Adults	40	48
Minors (16-18 years)	36	–
Minors (14-16 years)	24	–

Leave

Employees in Georgia are entitled to various types of leave, which are essential for maintaining a healthy work-life balance. The main types of leave include:

• Annual Leave: Employees are entitled to a minimum of 24 calendar days of paid annual leave after completing one year of service.
• Sick Leave: Employees can take sick leave as needed, but it is generally unpaid unless specified otherwise in the employment contract.
• Maternity Leave: Mothers are entitled to 730 calendar days of maternity leave, which includes 183 days of paid maternity leave and an additional 200 days of unpaid leave for complications or multiple births.
• Parental Leave: Parents can take parental leave until the child reaches the age of three, with specific provisions for paid and unpaid time off.

Leave Type	Duration	Payment Status
Annual Leave	24 calendar days	Paid
Sick Leave	As needed	Unpaid (unless specified)
Maternity Leave	730 calendar days	Paid (183 days)
Parental Leave	Until child is 3 years old	Varies (paid/unpaid)

Holidays

Georgia recognizes a total of 17 public holidays, during which employees are typically entitled to time off. If employees work on these holidays, they must be compensated accordingly. The major public holidays include:

1. New Year’s Day (2 days)
2. Orthodox Christmas Day
3. Orthodox Epiphany
4. Mother’s Day
5. International Women’s Day
6. Independence Restoration Day
7. Labor Day
8. Victory Day
9. St. George’s Day
10. State Independence Day
11. Day of the Holy Spirit
12. Assumption Day
13. Saint Andrew’s Day
14. Saint Nicholas Day
15. Christmas Eve
16. New Year’s Eve
17. National Unity Day

Holiday Name	Date Observed
New Year’s Day	January 1
Orthodox Christmas Day	January 7
Orthodox Epiphany	January 19
Mother’s Day	March 3
International Women’s Day	March 8
Independence Restoration Day	April 9
Labor Day	May 1
Victory Day	May 9
St. George’s Day	April 23
State Independence Day	May 26
Day of the Holy Spirit	June (varies)
Assumption Day	August 15
Saint Andrew’s Day	November 30
Saint Nicholas Day	December 6
Christmas Eve	December 24
New Year’s Eve	December 31
National Unity Day	February 16

Understanding the regulations surrounding working hours, various types of leave, and public holidays is crucial for employers operating in Georgia to ensure compliance with local labor laws and to foster a supportive work environment for their employees.

Termination Requirements

In Georgia, termination of employment is governed by specific legal requirements outlined in the Labor Code. Employers can terminate employment contracts for various reasons, including:

• Completion of the contract term
• Mutual agreement between the employer and employee
• Court order
• Long-term disability (exceeding 30 consecutive days or 50 days within six months)
• Death of the employee or employer
• Liquidation of the employer’s legal entity

Employers must ensure that terminations are documented and communicated clearly to the employee to avoid potential disputes.

Termination Reason	Description
Completion of Contract Term	The employment contract has reached its end.
Mutual Agreement	Both parties agree to terminate the contract.
Court Order	A legal ruling mandates termination.
Long-term Disability	Employee unable to work for extended periods due to health.
Death	Termination due to the death of either party.
Liquidation	The employer’s business entity is dissolved.

Notice Period

The notice period required for termination in Georgia varies based on the circumstances surrounding the termination. Generally, employers must provide a 30-calendar-day notice before terminating an employee, except during the probation period, where no notice is required. Notice must be given in writing.

Circumstance	Notice Period
Standard Termination	30 calendar days
During Probation Period	No notice required

Severance Pay

In Georgia, severance pay is not mandated by law but may be provided based on the employment contract or company policy. Employees are typically entitled to at least one to two months’ salary as severance pay upon dismissal, depending on the reason for termination. If specified in an employment contract or collective bargaining agreement, severance terms must be adhered to by both parties.

Severance Pay Scenario	Amount
Standard Termination	1-2 months’ salary
Contractual Obligation	As specified in contract

Probation Periods

The probation period in Georgia is a crucial time for both employers and employees to assess their working relationship. The maximum duration for a probation period is six months, and it must be clearly stated in the employment agreement. During this time, either party can terminate the employment without notice.

Probation Period Duration	Notice Requirement
Up to 6 months	No notice required

Understanding these aspects—termination requirements, notice periods, severance pay, and probation periods—is essential for employers operating in Georgia. Compliance with these regulations helps ensure fair treatment of employees while minimizing potential legal risks associated with wrongful termination claims.

Contractor Misclassification

In Georgia, misclassification of workers as independent contractors instead of employees can lead to significant legal and financial consequences. Misclassification occurs when a worker is treated as an independent contractor, but their work conditions and relationship with the employer align more closely with that of an employee. This distinction is crucial because it affects tax obligations, benefits eligibility, and legal protections.

Key Factors in Misclassification

To determine whether a worker is an independent contractor or an employee, several factors are taken into consideration:

• Control: Who has the authority to dictate how and when the work is performed?
• Tools and Equipment: Who provides the necessary tools and equipment for the job?
• Payment Structure: How is the worker compensated (e.g., hourly, per project)?
• Integration: How integral is the worker’s role to the business?
• Exclusivity: Is the worker allowed to provide services to other businesses?
• Duration of Relationship: What is the expected length of the working relationship?

If a business exerts significant control over how tasks are completed, provides necessary equipment, and if the worker primarily serves one client, they may be classified as an employee rather than an independent contractor.

Factor	Employee	Independent Contractor
Control	High	Low
Tools and Equipment	Provided by employer	Provided by contractor
Payment Structure	Regular salary	Per project or hourly
Integration	Essential to business operations	Non-essential or project-based
Exclusivity	Works only for one employer	Works for multiple clients
Duration of Relationship	Long-term	Short-term or project-based

Legal Obligations for Contractors

When hiring independent contractors in Georgia, businesses must comply with specific legal obligations:

• Written Contracts: Clear contracts should outline the scope of work, payment terms, and duration of engagement. This helps prevent misunderstandings and misclassification.
• Tax Responsibilities: Unlike employees, independent contractors are responsible for their own tax filings. However, businesses must ensure that they do not inadvertently treat contractors as employees through their practices.

Benefits of Hiring Contractors

Engaging contractors can provide several advantages:

• Flexibility: Contractors can be hired for specific projects or timeframes without long-term commitments.
• Cost Savings: Hiring contractors can reduce costs associated with employee benefits and taxes.
• Specialized Skills: Businesses can tap into specialized expertise that may not be available in-house.

Risks of Misclassification

Misclassifying a contractor as an independent worker can lead to:

• Financial Penalties: Employers may face fines and back taxes if misclassification is discovered.
• Legal Liabilities: Misclassified workers may seek benefits or protections typically afforded to employees, leading to potential lawsuits.

Risk Type	Description
Financial Penalties	Fines and back taxes owed
Legal Liabilities	Potential lawsuits from misclassified workers
Reputational Damage	Negative publicity due to non-compliance