New Statute Would Protect Freelancers Statewide
Freelancers…independent contractors…the “gig” economy. Regardless of the appellation, it’s the fastest growing sector of the economy. According to one study, the number of people working full-time as freelancers nearly doubled from 2020 to 2022, from just under 16 million to almost 32 million. Estimates are that up to 65 million Americans perform some type of freelance work every year.
While legal protections have long been in place for W-2 employees, ensuring timely and fair payment of wages, many freelance workers have a history of late payments, underpayments and outright refusals to pay. Recognizing both the growth in the gig economy and the need to provide basic protections to freelancers, New York City enacted a law in 2016, known as the Freelance Isn’t Free Act, or FIFA. The law went into effect on May 15, 2017 and has reaped significant benefits for freelance workers throughout New York City. Now, legislators want to extend those protections across the state of New York. Introduced in February, 2022, the proposed law, if enacted, would use the New York City law as a framework.
The Basic Requirements of NYC’s Freelance Isn’t Free Act
Under the provisions of FIFA currently in place in New York City, freelance workers are entitled to:
- A written employment agreement—If the total amount to be paid to the freelance worker is $800 or more, which includes all work done within a 120-day window, the business hiring the freelancer must put the terms of the agreement in writing. The written contract must include basic terms, such as the names and addresses of all parties, a description of the work to be performed, the rate and method of compensation, and the date the work must be completed.
- Timely payment upon completion of work—Absent any written agreement otherwise, a freelance worker must be fully paid no later than 30 days after work is finished.
- A right to seek damages for violation of the law or of an written agreement—The law grants freelancers certain rights, including the possibility of a 100% penalty of any amounts due and unpaid, plus attorney fees.
- Freedom from retaliation—An employer may not refuse to make payments, delay payments, deny work or take any other action as punishment or in retaliation for a freelancer exercising his or her legal rights under FIFA.
Who Qualifies as a Freelance Worker under the New York City Law?
The Freelance Isn’t Free Act includes a broad range of workers within the definition of “freelance,” defining the term to cover anyone who delivers or provides any type of service to another person or company in exchange for remuneration within the confines of New York City. Commissioned salespeople, lawyers, medical professionals and government contractor workers are specifically excluded, but small business owners may qualify, provided they have other employees.
Have You Been Treated Unfairly as a Freelance Worker?
At Stephen Hans & Associates, our attorneys are glad to answer your questions and provide legal advice. Years of experience have provided us with extensive knowledge regarding employment law, and we have represented numerous employers in matters involving workplace litigation.