According to the most recent data from the Georgia Department of Labor, the unemployment rate in Cherokee County had risen to 9.4 percent in July, with a rate of 10.7 percent in the metro area as a whole. Businesses in Georgia have a tremendous amount of discretion in hiring and firing employees, but there are a few considerations employers and employees should keep in mind as payroll cuts continue.
Workers in Georgia are usually employed "at will" - this means that employees can quit at any time, and employers can fire for any reason, or for no reason at all. This general rule can sometimes result in unfair or irrational decisions; it reflects the state legislature's policy to avoid interference in business operations. Employees with contracts of employment of a definite term and some government employees with due process rights have protections most workers don't enjoy.
The majority of workers in Georgia are "at will," but there are a number of restrictions on how employers go about terminating these employees. These include:
Discrimination laws: State law gives employers a free hand in making employment decisions, but a number of federal laws, such as Title VII and the Americans with Disabilities Act, allow employees to challenge termination decisions which may have been based upon factors such as race, national origin, age, religion or disability. Employers with 15 or more employees should ensure that individual termination decisions can be explained based on legitimate business considerations.
Whistleblower protections: Employers are prohibited from selecting for termination employees who have complained about illegal practices such as failure to comply with minimum wage and overtime laws, unsafe workings conditions, or discrimination. Like employees protected under discrimination laws, employees who have made complaints are not immune from termination, but employers cannot select these employees for termination because of these kinds of complaints.
WARN Act: When large private employers decide to make mass layoffs (at least 50 employees) or plant closings, such employers are required to give employees at least 60 days written notice of the planned action, with certain exceptions. In addition to permanent layoffs, this law may require that notice be provided in situations involving layoffs of six months or more, or when an employee's hours are cut more than 50 percent during a six-month period.
Unemployment benefits: Georgia employees who are fired as part of a layoff or downsizing will usually be entitled to unemployment benefits, unlike employees who are terminated based on fault. Businesses can usually avoid being charged for unemployment benefits if they can establish that an employee violated clear work rules and had been warned that termination was a possible consequence.
Many businesses choose to offer severance benefits to employees who are terminated. Unless there is a written contract or enforceable policy granting severance, the payment of severance benefits and the amount of benefits paid is entirely within the employer's discretion. Employers usually require an employee to sign a document containing a release of all claims as a condition to receiving severance.
Severance agreements take many forms. However, employers are required to follow certain procedures in order to obtain effective releases of claims of age discrimination (for employees aged 40 or more). These procedures vary depending on whether the employee is terminated individually or as part of a group layoff. If the employee is terminated individually, federal law requires that the employee be allowed 21 days in which to consider the release before signing. After signing the release, the employee may rescind the release within seven days. If the employee is part of a group layoff, the waiting period is extended to 45 days. In addition, the employer is required to give the employee information about the group of employees selected for layoff, as well as the group retained, with the ages of both groups for comparison. The release must specifically mention the age discrimination act, and advise the employee to consult an attorney before signing the release.
Even when severance is not offered, terminated employees are generally eligible for COBRA benefits, provided the employer has at least 20 employees. There are exceptions, such as employees who are terminated for "gross misconduct." A new wrinkle in the law came in the form of additional benefits provided in the stimulus package passed in 2008. Eligible employees terminated from September 2008 through the end of 2009 pay only 35 percent of COBRA premiums for up to nine months; this reduction isn't available for employees who are eligible for another group plan, and can also be limited based on income.
Losing a job is almost always difficult, and giving the bad news to the employee is difficult as well. Even so, I am continually amazed at how often an employee fired from a good job eventually finds a new one, which is an even better fit. An awareness of some of these employment rules should, at least, take some of the uncertainty out of the process.
Linwood Gunn is a partner in the law firm of Roach, Caudill & Gunn, LLP in Canton. He practices in the areas of general and commercial litigation, employment law, education and securities law.