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New Law Protects New York City’s Freelance Workers

Published by and on July 21, 2017

Freelance workers are entitled to expansive protections under New York City’s law, a trend that could expand to other cities.

Freelance workers are entitled to expansive protections under New York City’s law, a trend that could expand to other cities.

On May 15, 2017, a new law —- the first of its kind —- went into effect in New York City called the Freelance Isn’t Free Act (FIFA). This law provides protections to freelance workers in New York City. A freelance worker under the act is defined as “any natural person or any organization composed of no more than one natural person . . . that is hired or retained as an independent contractor by a hiring party to provide services in exchange for compensation.” The act does not apply to sales representatives, attorneys, and licensed medical professionals. Conversely, a hiring party is “any person who retains a freelance worker to provide any service” (not including federal, state, and local government agencies).

FIFA requires that a hiring party and a freelance worker execute a written contract for all services that have a value of $800 or more (or for contracts from the preceding 120 days that amount to $800 or more in the aggregate). The written contract must include the names and mailing addresses of both parties, a list of all services the freelance worker will provide, the value of such services, the rate of compensation and the date that compensation is due (or when such a date will be determined). The Act requires that the freelance worker be paid by the date specified in the contract or within 30 days after the completion of services if no due date is included. A hiring party cannot require that a freelance worker accept less compensation than the amount agreed upon once the worker has commenced services. Additional damages may be available in instances where a freelance worker shows a pattern or practice of violations.

The Act also prohibits hiring parties from threatening, intimidating, disciplining, harassing, denying a work opportunity to or discriminating against a freelance worker. Hiring parties cannot deter a worker from exercising their rights under the Act. A freelance worker may file a complaint or lawsuit for alleged violations of the Act up to two years after the alleged violation. The Act provides that a freelance worker may recoup attorneys’ fees, costs, statutory damages of up to $250 and damages equal to the value of the contract. A prevailing freelance worker may also receive double damages if the hiring party commits an unlawful pay practice.

The Act directs that a program be established to provide assistance and information regarding compliance with the Act and that model contracts be made available online. A brochure with information about the law for those who hire freelance workers can be found here: https://www1.nyc.gov/assets/dca/downloads/pdf/businesses/Freelance-Info-for-Hiring-Parties.pdf.

Welter Insight

Employers who hire freelance workers in New York City should closely review FIFA as it implements several new requirements when it comes to business dealings with freelance workers. While FIFA is limited only to those who hire freelance workers in New York City, employers elsewhere should monitor its impact, in the event other jurisdictions begin to increase protections for freelance workers. The importance and impact of such protections will most likely only grow with the expansion of the gig economy.

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