On May 15th the Freelance Isn’t Free act went into effect in New York City. The law is intended to protect freelancer workers but also has implications for companies that hire freelancers. Read below for a quick summary and please feel free to reach out with any questions.
The law would apply anytime a Freelancer is hired for work that is valued at $800 or more. The law defines a “Freelancer” as any person or organization (meaning a Limited Liability Company or a Corporation) of no more than one person. A Freelancer is not a sales representative, lawyer or medical professional.
Freelancers hired for work valued over $800 must have a written contract. The $800 benchmark is not per project, it is for all work in the preceding 120 days. The written contract must include:The name and mailing address of both the hiring party and the Freelancer;Itemization of all services to be provided by the Freelancer, the value of the services, and the rate and method of compensation; Finally, it must include the date on which the Freelancer will be paid, or the mechanism (such as acceptance of the deliverable) by which the date will be determined.
The Freelancer must be paid on or before the date specified in the contract or, if unspecified, within 30 days after completion of services under the contract. Once a Freelancer commences work, a company may not require as a condition of timely payment that the Freelancer accept less than the contracted compensation.
There are penalties for companies that do not comply with the law. They include: $250 statutory fine for not having a written contract (Freelancer must establish that they asked for a contract);For unlawful payment practices a Freelancer may be entitled to damages equal to the fees due under the contract; double damages; injunctive relief; and attorney’s fees; If a judge finds a company has a pattern of abusing the law they can impose monetary penalties up to $25,000.
Other things you should know:
- A company cannot retaliate against a Freelancer for exercising or attempting to exercise their rights under the bill. There will be a complaints process through the Director of the Department of Consumer Affairs (the Director will not have jurisdiction if a claim is first filed in civil court).
- If the Director receives a complaint against a company, the company will receive notice within 20 days. The company will have 20 days to respond with a written statement that either (a) the Freelancer has been paid in full with proof of payment, or (b) the company’s reasons for failure to pay the Freelancer.
This post was written by Rebecca Bernstein. if you would like to learn more about our Corporate & Business please contact Greg Mavronicolas at firstname.lastname@example.org or (646) 484-9569, or Rebecca Bernstein at email@example.com or (646) 770-2137.
This blog is intended to identify select legal issues and developments that may be of interest. The information contained herein may be originate from various sources. As such, the accuracy and completeness of this information cannot be assured. Relevant laws and regulations may change or be subject to differing interpretations. This blog should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.