On November 22, 2023, Governor Kathy Hochul of New York signed into law the “Freelance Isn’t Free Act,” aimed at safeguarding the rights of freelance workers. This bill closely aligns with the existing law of the same name in New York City, which came into effect in May 2017.
Key Provisions of the Freelance Isn’t Free Act (Section 191-d of the Labor Law):
- Definitions:
- The law defines a “freelance worker” as an individual or a single-member organization hired as an independent contractor by a “hiring party” for services totaling $800 or more within 120 days.
- Exclusions from the freelance worker category include sales representatives, practicing attorneys, licensed medical professionals, and construction contractors.
- Written Contract Requirement:
- A written contract is mandatory.
- The contract must include details such as names and addresses of both parties, a breakdown of services and their value, compensation rates, payment deadlines, and the date by which the freelance worker must provide a list of all services actually provided.
- The hiring party must retain a copy of the contract for at least six years.
- Model contracts are provided by the Department of Labor.
- Payment Deadline:
- Payment must be paid to the worker on or before the specified date in the contract or within 30 days after the completion of services if the contract lacks a payment timeline.
- Once services commence, the hiring party cannot condition timely payment on the acceptance of reduced compensation.
- Rulemaking:
- The Commissioner of Labor is granted the authority to issue rules ensuring clarity on obligations under the contract.
- No Retaliation:
- Hiring parties are prohibited from retaliating against freelancers for exercising their rights under the law.
- Violations and Remedies:
- Freelancers can file complaints with the Commissioner of Labor, who may investigate and impose relief, including civil and criminal penalties.
- The Commissioner can take assignments of claims from freelancers, sue hiring parties, join wage claims, and enter into reciprocal agreements with other states for enforcement.
- Freelancers can file civil actions for damages, with actions for non-payment or retaliation subject to a six-year statute of limitations.
- Prevailing plaintiffs may recover double damages, injunctive relief, attorneys’ fees, costs, and other appropriate remedies.
- Effective Date:
- The law becomes effective on May 20, 2024, and applies to contracts entered into on or after that date.
- Practical Implications:
- Businesses engaging freelancers should ensure written agreements are in place by the law’s effective date.
- The law focuses on individual service provider engagements, emphasizing the need for businesses to accurately classify workers under applicable laws.
- Consultation with legal counsel is advised to assess risks and take steps to minimize potential liability in contract worker relationships.
Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560