On November 16, 2016, the New York City Council passed the Freelance Isn’t Free Act (Int. 1017-2015) with the purpose of protecting freelance workers. Starting March 15, 2017, employers or hiring parties will be required to provide a written contract when employing a freelance worker for services with a value of $800 or more. The $800 value can be from a single agreement or combined agreements between the parties in the preceding 120 days. In the text of the law, a freelance worker is defined as “any natural person or organization composed of no more than one natural person, whether or not incorporated or employing a trade name that is hired or retained as an independent contractor by a hiring party to provide services in exchange for compensation.” The Act exempts sales representatives, individuals engaged in the practice of law, and medical professionals. A hiring party is defined as “any person who retains a freelance worker to provide any service,” except for federal, state or local government, and any foreign government. The written contract must include:
- Name and address of both parties,
- Itemization of all services,
- Value of the services,
- Rate and method of compensation, and
- The date on which the hiring party must pay for the services or the mechanism by which such date will be determined.
Furthermore, the Act states that hiring parties must pay freelance workers on or before the date such compensation is due. If the compensation due date is not clearly stated in the contract, the hiring party must pay it within 30 days of completion of services. Once work has been started, the hiring party cannot require the freelance worker to accept less compensation than what was agreed on as a condition of timely payment. Hiring parties are prohibited from retaliating against freelance workers for exercising their rights under the Act. If freelance workers feel their rights were violated, they can file a complaint with the City’s Office of Labor Standards within two years of the alleged violation, or bring an action in court.
Failure to provide a written contract by the hiring party may result in statutory damages of $250. Additionally, retaliating against freelance workers for exercising their rights under the Act may result in damages equal to the value of the contract, attorney’s fees and costs. Similarly, unlawful payment practices may result in double damages and injunctive relief. Employers that hire freelance workers in New York City should start reviewing their contracts to make certain their payment practices are in compliance with the new law.