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In October 2016, the New York City Council passed the Freelance Isn’t Free Act, which protects freelancers from late or insufficient payment made by hiring parties. Freelancers are individuals who are hired or retained as independent contractors to provide services in exchange for payment. According to the Freelancer’s Union, 70% of freelancers in New York have experienced difficulty obtaining payment for agreed-upon work they performed, leading to an average loss of $6,000 per freelancer per year. With the passage of the Freelance Isn’t Free Act, freelancers are given rights that aim to combat these payment issues.
Under the Act, freelancers have the right to a written contract, timely payment in full, and protection from retaliation. Written contracts are required when the work is valued at $800 or more, and must contain the names and addresses of the hiring party and the freelancer, an itemized list of all services to be provided, the value of each of the services, the rate and method of compensation, and the date payment is due. Note that if a date is not specified, full payment must be provided within 30 days after the work is completed.
The Act affords freelancers further protection by penalizing hiring parties for taking actions that might deter a freelancer from exercising his or her rights, or from obtaining future work.
Freelancers generally have two years in order to file a complaint against a hiring party with the Office of Labor Standards. However, they may also file a civil action for which the statute of limitations is two years for failure to provide a written contract, and six years for nonpayment or retaliation. Furthermore, in order to deter hiring parties from infringing on freelancers’ rights, the NYC Corporation Counsel may file suit against one who has repeatedly violated the Act, which could lead to penalties of up to $25,000.
Hiring parties need to be vigilant in their efforts to comply with this new law by ensuring that all of their agreements with freelancers are detailed in writing and strictly followed.