NYC Passes the “Freelance Isn’t Free Act”

NYC recently passed, with 51 votes, the “Freelance Isn’t Free Act“, which offers significant wage protections to freelance workers. The law becomes effective on May 15, 2017.

The New York City Council provides the following summary of the law, which is codified at newly-added chapter 10 to Title 20 of the Administrative Code of the City of New York (§§ 20-927 – 936):

This bill would establish and enhance protections for freelance workers. Specifically: the right to written contract, the right to be paid timely and in full and the right to be free of retaliation. The bill would create penalties for violations of these rights, including statutory damages, double damages, injunctive relief and attorney’s fees. Individual cause of action would be adjudicated in state court. Where there is evidence of a pattern or practice of violations, the Corporation Counsel may bring civil action to recover, on behalf of the City, civil penalty of not more than $25,000. This bill would also require the Office of Labor Standards (OLS) to receive complaints, create a navigation program, and to gather data and report on the effectiveness of the law.

The law provides, in part:

§ 20-928 Written contract required. a. Whenever a hiring party retains the services of a freelance worker and the contract between them has a value of $800 or more, either by itself or when aggregated with all contracts for services between the same hiring party and freelance worker during the immediately preceding 120 days, the contract shall be reduced to writing. Each party to the written contract shall retain a copy thereof.

b. The written contract shall include, at a minimum, the following information:

1. The name and mailing address of both the hiring party and the freelance worker;

2. 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

3. The date on which the hiring party must pay the contracted compensation or the mechanism by which such date will be determined. …

§ 20-929 Unlawful payment practices. a. Except as otherwise provided by law, the contracted compensation shall be paid to the freelance worker either:

1. On or before the date such compensation is due under the terms of the contract; or

2. If the contract does not specify when the hiring party must pay the contracted compensation or the mechanism by which such date will be determined, no later than 30 days after the completion of the freelance worker’s services under the contract.

b. Once a freelance worker has commenced performance of the services under the contract, the hiring party shall not require as a condition of timely payment that the freelance worker accept less compensation than the amount of the contracted compensation.

§ 20-930 Retaliation. No hiring party shall threaten, intimidate, discipline, harass, deny a work opportunity to or discriminate against a freelance worker, or take any other action that penalizes a freelance worker for, or is reasonably likely to deter a freelancer worker from, exercising or attempting to exercise any right guaranteed under this chapter, or from obtaining future work opportunity because the freelance worker has done so.

(Emphasis added.)

The law “takes effect 180 days after it becomes law and applies only to contracts entered into on or after the effective date of this local law.”