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November 3, 2016

New York City Council Passes the Freelance Isnít Free Act

On October 27, 2016, the New York City Council passed the “Freelance Isn’t Free Act” (the “Act”) establishing wage theft protections for independent contractors, including freelance workers.† Mayor de Blasio is expected to sign the Act into law. The Act does not apply to attorneys, licensed medical professionals, or commissioned sales representatives.

The Act requires freelance workers’ contracts to be in writing whenever employed to perform services worth at least $800.† This $800 threshold can be met by one project, or multiple projects aggregated over a 120-day period.† The written contract must contain: (1) the name and mailing address of both the employer and the freelance worker, (2) an itemization of all services to be performed, (3) the value of the services to be provided and the rate and method of compensation, and (4) the date on which the employer must pay the agreed-upon compensation.† If the contract is silent on the payment due date, payment must be made within 30 days of the completion of services.††

The Act also establishes the right of aggrieved freelance workers to file a complaint with the Director of the Office of Labor Standards.† The complaint must detail the alleged violations of the employer and be filed within two years of the alleged actions.† After receiving the complaint, the Director will send notice to the employer.† The employer can respond by paying for the work, respond with proof of payment, or not respond at all.† If no response is received, the freelance worker can commence a civil action under the Act and the employer will bear the burden to disprove liability. The Act exposes Employers to potential liability for double damages as well as attorneys’ fees.

Takeaway for Employers

The Act will take effect 180 days after receiving the Mayor’s signature and, when signed, will only apply to contracts entered into on or after the effective date.† Employers who utilize freelance workers should evaluate their policies and adjust accordingly. Employers should also review and update their independent contractor agreements as well as their payment practices.†

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If you have any questions regarding the Act, please do not hesitate to contact us.