During what has already been a huge year for labor and
employment law developments in the Empire State, the New York City Council has
taken another step toward turning the Big Apple into a paradise of
worker-friendly laws. Last week, the council unanimously passed a bill enacting
certain restrictions for businesses that hire freelance workers.
The “Freelance
Isn’t Free” Act, introduced last December, amends the New York City
Administrative Code to require a written contract between a freelance worker
and the business engaging them if either a single engagement or an aggregate of
engagements between the parties within the past 120 days has a value of $800 or
more.
The written contract must contain the name and mailing address of the
hiring party and the freelance worker, a list and value of the services the
freelance worker will provide, the rate and method of compensation, and the
date by which the freelance worker must be paid or the mechanism for
determining that date. If a contract does not specify when the freelancer must
be paid or a mechanism for determining that date, payment is due no later than
30 days after the work is completed, and the hiring party cannot require that
the freelancer takes less than the agreed upon amount as a condition of timely
payment. Contract provisions that attempt to waive the freelancer’s rights are
void.
A freelance
worker is defined as “any natural person or any organization composed of no
more than one natural person, whether or not incorporated or employing a trade
name, that is hired or retained as an independent contractor by a hiring party
to provide services in exchange for compensation.” It excludes sales representatives
as defined by the labor law, lawyers, and licensed medical professionals.
The act also
includes a mechanism for freelancers to report complaints to a division within
the city’s Department of Consumer Affairs and prohibits retaliation. Freelancers
have two years to file complaints with the city. They may also file a civil
action within six years of certain violations.
Finally, the law
authorizes penalties ranging from $250 in some cases to double damages in
others, in addition to attorney’s fees, and allows the city’s corporation
counsel to bring an action against hiring parties who are repeat offenders. A
court may award a civil penalty of up to $25,000 after finding a hiring party
has engaged in a pattern or practice of violations.
What
to Do Now
The act still
needs to be signed by the mayor, but in the meantime, companies that contract
with freelance workers should examine their current independent contractor
practices and develop procedures where none exist. Businesses with operations
in other large cities should monitor local news in case other city councils
decide to follow suit.
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