HB395: HB395 Labor and industrial relations; minimum wage; provide for an increase

Georgia's minimum wage law (O.C.G.A. § 34-4-3) currently sets a state minimum wage of $5.15 an hour, far below the federal minimum wage that most employers already must pay, and it exempts many small and specific employers from having to pay it at all. HB 395 rewrites that section to raise the state minimum wage to $15.00 per hour and to let employers of tipped workers, such as restaurant servers, count up to 50 percent of tips toward meeting that wage. The bill also removes several exemptions from the state minimum wage law, including the ones for employers with five or fewer employees, domestic employers, and farm owners, sharecroppers, or land renters. It raises the small-business sales exemption from $40,000 to $100,000 in annual sales, meaning fewer very small businesses would be exempt at the higher wage. It also raises the compensation floor for live-in employees of certain nonprofit child care or long-term care facilities from $10,000 to $15,000 a year. The changes would take effect January 1, 2026.

• Raises Georgia's state minimum wage from $5.15 to $15.00 per hour for covered employees.
• Creates a tip credit letting employers of tipped workers count tips toward up to 50 percent of the minimum wage owed.
• Removes the minimum wage exemptions for employers with five or fewer employees, domestic employers, and farm owners, sharecroppers, or land renters.
• Raises the small-business sales exemption threshold from $40,000 to $100,000 in annual sales, exempting more small operations from the law.
• Raises the annual compensation floor for live-in workers at certain nonprofit child care or long-term care facilities from $10,000 to $15,000.
• Sets the changes to take effect on January 1, 2026.

Georgia workers currently paid the state minimum wage, including tipped restaurant and service workers, domestic employees, farm workers, and employees of very small businesses, as well as the employers of those workers and nonprofit child care or long-term care facilities that house live-in staff.

Workers currently covered by the low $5.15 state minimum wage, along with groups newly brought under the law like farm and domestic workers, would see their legal minimum pay rise sharply to $15.00 an hour, while employers of tipped workers would gain a way to offset part of that cost with tips.

• Section 1 rewrites O.C.G.A. § 34-4-3(a) to raise the state minimum wage from $5.15 to $15.00 per hour.
• Section 1 adds a new subsection (b) allowing employers of tipped workers who qualify under the federal Fair Labor Standards Act to credit tips toward up to 50 percent of the minimum wage.
• Section 1 raises the small-employer sales exemption in subsection (c)(1) from $40,000 to $100,000 in annual sales.
• Section 1 removes the exemptions for employers with five or fewer employees, domestic employers, and farm owners, sharecroppers, or land renters.
• Section 1 raises the compensation threshold for live-in workers at certain nonprofit child care or long-term care facilities from $10,000 to $15,000 per year.
• Section 2 sets the effective date as January 1, 2026.
• Section 3 repeals conflicting laws.

1. 2025-02-13House Second Readers (House)
2. 2025-02-12House First Readers (House)
3. 2025-02-11House Hopper (House)

• Dewey McClain (D, HD-109)Primary sponsor
• Carolyn Hugley (D, HD-141)
• Kimberly Alexander (D, HD-066)
• Sheila Jones (D, HD-060)
• Derrick Jackson (D, HD-068)
• Gabriel Sanchez (D, HD-042)

• minimum wage
• labor law
• tipped workers
• farm workers
• small business regulation