On May 15, 2017, New York City implemented the Freelance Isn't Free Act ("FIFA" or the "Act"), which establishes new protections for freelance workers. FIFA requires that whenever a person or company retains the services of an independent contractor and the contract between them has a value of $800 or more (either independently or when aggregated with all contracts for services that have been entered into by the parties during the preceding 120 days), the contract must be in writing. FIFA does not cover salespersons working as independent contractors, lawyers engaging in the practice of law, or licensed medical professionals.
The written contract must include:
- The name and mailing address of the hiring business or individual and the freelance worker;
- An itemization of all services to be provided by the freelance worker, the value of the services to be provided pursuant to the contract, and the rate and method of compensation; and
- The date on which payment of the contracted compensation must be made or the mechanism by which such date will be determined.
Freelance workers must be compensated on or before the date their compensation is due under the terms of the contract. If the contract does not specify when the freelance worker must be paid or the mechanism by which such date will be determined, payment must be made no later than 30 days after the completion of the freelance worker's services under the contract. Once a freelance worker has commenced performance of services under the contract, the hiring business or individual may not require, as a condition of timely payment, that the freelance worker accept less compensation than the amount of the contracted compensation.
FIFA also protects freelance workers from retaliation by prohibiting hiring businesses and individuals from threatening, intimidating, disciplining, harassing, denying a work opportunity to or discriminating against a freelance worker, or taking any other action that penalizes a freelance worker for exercising any right guaranteed under FIFA, or from obtaining future work opportunities because the freelance worker has done so.
Freelance workers can file complaints with the Director of the New York City Office of Labor Standards or commence a civil action in court for alleged violations of FIFA. Courts may award independent contractors $250 plus costs and attorneys' fees if they are not provided a written contract in violation of FIFA even if there are no other violations of the Act. Where a hiring business or individual fails to compensate an independent contractor as required by FIFA, the independent contractor may be entitled to double damages and injunctive relief. Furthermore, if a business or individual has engaged in a pattern or practice of violating FIFA, courts can also impose a civil penalty of up to $25,000.
Anyone hiring independent contractors or freelancers in New York City on or after May 15, 2017 should make sure they are in compliance with the new requirements set forth in the Freelance Isn't Free Act.
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