by Zach Morahan and Shannon Kane
New York City’s new “Freelance Isn’t Free Act,” which goes into effect May 15, requires written contracts for many freelance jobs worth $800 or more and provides for stiff monetary remedies if the hiring party tries to avoid paying the freelancer for work performed.
Under the new law, a “freelance worker” means any person or organization composed of no more than one person who is hired as an independent contractor in exchange for compensation. Commissioned sales representatives and attorneys are excluded from the definition of freelance worker. The definition of “hiring party” excludes foreign, federal, state, and local municipalities.
The law requires a hiring party to secure a written contract with a freelancer when the job is to perform services worth more than $800. The $800 threshold can be reached based on a single project or multiple projects, including work performed within the previous 120 days.
Regarding payment, the law makes it unlawful to fail to pay the freelancer for services as required under the contract or, if the contract is silent on the time of payment, within 30 days of the freelancer’s performance of the work. The law also makes it unlawful to condition payment on the freelancer accepting less than the full contractual payment.
Costs of violations
Under the law, a freelancer can file a complaint with the director of New York City’s Office of Labor Standards or file a lawsuit. A freelancer who prevails is entitled to damages, reasonable attorneys’ fees, and costs. Other penalties include the following:
- A hiring party that fails to secure a written contract with a freelancer when required will be liable for a $250 penalty (in addition to other damages for other breaches, if proven) plus attorneys’ fees and costs.
- A hiring party that fails to pay a freelancer money owed under the contract (or within 30 days of performance of the services if the contract is silent on that term) will be liable for double damages and injunctive relief plus attorneys’ fees and costs.
- A hiring party that retaliates against a freelancer will be liable for damages equal to the value of the contract “for each violation” plus attorneys’ fees and costs.
- A “pattern or practice” of violations will result in a $25,000 civil penalty, payable to the city’s general fund.
For more information on New York City’s new freelancer law, see the December 2016 issue of New York Employment Law Letter.