On Monday, May 15, the country’s first law protecting freelancers from deadbeat employers went into effect in New York City—home to over one million freelancers and independent contractors.
The “Freelance Isn’t Free Act” ensures freelancers and independent contractors get paid on-time and in-full for the work they perform. The act was developed by NYC Council Member Brad Lander, the Freelancers Union, and the Department of Consumer Affairs.
According to a Freelancers Union survey, over 70% of freelancers in New York City have been cheated out of payments, averaging more than $6,000 a year.
“We hope the new ‘Freelance Isn’t Free Act’ will become a model for other cities and states around the country, who believe that everyone should get paid on-time and in-full for their work,” Lander said in a statement announcing the Act.
As of Monday, May 15, 2017, the following rules will apply for any business or individual using the services of a freelancer or an independent contractor:
-Any “hiring party” (a company or an individual) that hires a freelancer (contractor) for work totaling more than $800 must execute a simple, written contract that describes the work to be completed, the rate and method of payment, the date when payment is due, and the general contact information for both parties. Even an e-mail detailing all these terms will do.
The Department of Consumer Affairs’ website has a sample of a “Freelance Work Agreement” contract.
-Full payment is required within 30 days of the completion of the services or of the payment due date on the contract (whichever date is later).
Hiring parties who fail to pay will face penalties, including double damages, civil penalties, and paying the plaintiff’s attorney’s fees.
As of Monday, May 15, 2017, the following services will be available for freelancers and independent contractors:
-The NYC Department of Consumer Affairs will assist freelancers with complaints of non-payment from an employer.
The Department of Consumer Affairs has set up a new Freelance Workers resource page, which includes information about the “Freelance Isn’t Free Act,” sample contracts, and complaint forms.
Within two years of not getting paid from an employer, a freelancer can file a complaint with the Department of Consumer Affairs’ Office of Labor Standards. The Office will send a certified letter to the offending employer within 20 days, explaining how the freelancer’s contract was breached, according to Gothamist.
-The Freelancers Union also offers resources for independent contractors facing non-payment, and will help freelancers exercise their rights.
The Union also launched a new app to help freelancers find attorneys specializing in similar cases, Gothamist reports. The app is still in pilot phase, with approximately 30 NYC attorneys signed up. The Union only refers workers with the app and does not help in agreements between the attorneys and the complainants. The attorneys will typically take these cases on a contingency basis, meaning if the freelancer/plaintiff wins, the employer/defendant will have to pay the attorney’s fees, the article states.
“With more and more American workers engaged in ‘alternative work arrangements’ than ever before—up from 10.1 percent in February 2005 up to nearly 16 percent in late 2015—we need new models for protecting and supporting workers in the gig economy,” Council Member Lander says.