On May 15, 2017, the New York City Freelance Isn't Free Act (Local Law 140 of 2016) took effect. This first-of-its kind act is designed to protect freelance workers and establishes penalties for employers who violate the law. If you are a freelance worker in New York City, or if you are an individual or a business who employs freelance workers, what should you know about the recently-enacted law?
The Freelance Worker in New York City
New York law defines a freelance worker as an organization consisting of no more than one person that is hired or retained as an independent contractor to provide services in exchange for monetary compensation. In other words, most individuals who work as independent contractors may be defined as freelance workers. The law's definition of a freelance worker excludes sales representatives, individuals practicing law, and licensed medical professionals. It is important to understand whether you are covered under this act, and what protections support you and your business. Workers are sometimes misclassified as independent contractors, and a worker who is designated a "freelancer" may actually be an employee under the law.
Protections for Freelance Workers Under the Freelance Isn't Free Act
The act sets standards and levels the playing field for independent contractors, who traditionally have been denied many of the rights of employees. Specifically, the Freelance Isn't Free Act clarifies that freelance workers have a right to the following:
● A written contract;
● To be paid timely and in full; and
● To be free of retaliation.
More precisely, the law requires that, for the protection of the worker, a contract between a freelance worker and an employer (or hiring party) must be in writing if it is worth $800 or more. In addition, the law prohibits companies from underpaying freelance workers and from paying freelance workers late. Finally, the law makes clear that companies cannot retaliate against freelance workers when they exercise their rights.
The NYC Department of Consumer Affairs provides a model contract for freelance workers, as well as a complaint form for freelance workers to use in the event that they have not been paid in a timely manner or in full, or in the event that they have faced retaliation after exercising their rights.
Hiring Party Responsibilities Under the Act
If you are not a government entity and you hire a freelance worker, then you are a "hiring party" under the Act. A hiring party must:
● Have a written contract with a freelance worker if the job totals $800 or more in a 120-day period;
● Make timely payment (based on the payment date(s) in the contract) to the freelance worker for completed work, or if there is no payment date, within 30 days after the freelancer has completed the work; and
● Never penalize, threaten, or otherwise blacklist a freelance worker because she exercised her rights under the law.
The Act provides specific penalties for violations of any of the above requirements and entitles affected workers to damages. If you have questions about the Freelance Isn't Free Act, you should discuss your concerns with a New York employment law attorney.