HB 395: Labor and industrial relations; minimum wage; provide for an increase

Georgia's minimum wage law currently sets a base rate of $5.15 per hour, far below the federal minimum wage that already applies to most workers. This bill rewrites that law (O.C.G.A. § 34-4-3) to set the state minimum wage at $15.00 per hour. It also creates a new tip credit: employers of tipped workers who qualify under federal wage law can count up to 50 percent of an employee's tips toward meeting the $15.00 minimum. The bill also changes who is exempt from the law. It raises the small-business sales exemption from $40,000 to $100,000 in yearly sales, keeps the exemption for employers with five or fewer employees, and removes exemptions that previously applied to domestic workers, farm owners and sharecroppers, and tipped employees generally. It also removes a provision that exempted employers already covered by a higher federal minimum wage. The changes would take effect January 1, 2026.

• Raises Georgia's minimum wage from $5.15 to $15.00 per hour under O.C.G.A. § 34-4-3.
• Creates a new tip credit letting qualifying employers count up to 50 percent of tips toward the $15.00 minimum wage.
• Raises the small-business exemption threshold from $40,000 to $100,000 in annual sales.
• Removes minimum wage exemptions previously covering domestic employees, farm owners, sharecroppers, land renters, and employees paid mainly through tips.
• Removes the exemption for employers already covered by a higher federal minimum wage requirement.
• Raises the pay threshold for exempt nonprofit institutional workers (child-caring or long-term care facilities) from $10,000 to $15,000 a year.

Georgia workers currently paid the state minimum wage or tips, including domestic workers, farm laborers, and tipped restaurant and service employees who previously fell outside the law's coverage. Small businesses, farm owners, and nonprofit child-care or long-term care facilities that employ workers under these rules would also be affected.

Workers earning close to Georgia's current $5.15 floor could see a large pay increase to $15.00 an hour, while tipped workers' wages would depend partly on tips under the new credit. Small businesses near the sales threshold and previously exempt employers like farms and households would face new wage obligations.

• Section 1 rewrites O.C.G.A. § 34-4-3 to set the minimum wage at $15.00 per hour, replacing the previous $5.15 rate.
• Section 1 adds a new subsection allowing a tip credit of up to 50 percent of the minimum wage for employers of eligible tipped workers under federal law.
• Section 1 raises the small-business exemption from $40,000 to $100,000 in annual sales and keeps the five-employee exemption.
• Section 1 eliminates exemptions for domestic employees, farm owners, sharecroppers, land renters, and tipped employees generally.
• Section 1 raises the pay floor for exempt nonprofit institutional workers from $10,000 to $15,000 annually.
• Section 1 removes the prior exemption for employers already subject to a higher federal minimum wage.
• 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
• small business regulation
• wage exemptions