The last 10 years have seen enormous growth in the “gig” economy. There are several terms used to describe a worker in the gig economy - independent contractors, taskers, side hustlers, “1099’s”, spec workers, moonlighters - but perhaps most commonly, FREELANCERS. All of these monikers refer to the same thing: An individual hired or retained by a person or a business to provide services for compensation. A freelancer is different than an employee, but this distinction is sometimes hard to discern. This article will focus only on the rights of true freelancers - those individuals who are in business for themselves, offer their services to the general public, and are generally in control of the ways and means that they provide these services.
The work life of a freelancer can be very rewarding. As one’s own boss, a freelancer can often choose where they work, when they work, and how they work. However, it is not uncommon for freelancers to have trouble collecting fees from clients. The process of getting paid can be impeded by a client’s stubbornness, a freelancer’s hesitance in taking legal action, or even the belief that if the fee is not large then it isn’t “worth it” to pursue a legal claim against the hiring party. Perhaps unknown to most freelancers, there has been a law on the books in New York City since 2017 that does just this: The Freelance Isn’t Free Act. As the name suggests, the law addresses the issues of fair and timely pay for freelancers working in New York City.
Under the Freelance Isn’t Free Act, all freelancers in New York City have a right to the following, regardless of their immigration status:
A Written Contract
Freelancers are entitled to have their contract spelled out in a signed writing if they are providing $800 or more of services (whether at one time or over multiple jobs in a span of 120 days). Often times, freelancers are weary of demanding a contract as a condition of them providing services. Who will write the contract? What to include? Do they need to hire an attorney? Will the client push back on this demand? The law in New York City now answers these questions: The hirer must provide a written contract, and for the purposes of the law, it needn’t be long or attorney-drafted. The contract must simply state the work to be performed, for what cost, and the date of payment.
You’ve provided the services, but what if the client balks on the payment? This is very common concern for freelancers. One complaint we hear commonly is that for smaller jobs, it may cost as much, or more, than you were to be paid to recover payment through the courts. The Freelance Isn’t Free Act now makes such actions unlawful, and subjects the hirer to penalties if the freelancer is not paid when the contract demands. If the contract does not set a date for payment, then the freelancer is entitled to payment within 30 days after the work is completed.
Protection Against Retaliation
Another common complaint we hear from contractors is that they’re afraid to go after their rightfully earned compensation out of fear that it might hurt their reputation or dissuade the client, or others in an industry, from hiring them in the future. The Freelance Isn’t Free Act makes it illegal for any hirer to penalize, threaten, blacklist, or otherwise deter a freelancer from exercising their rights under the law.
Great, so I have a right to be paid timely matter - but what if I’m not?
The biggest effect that this law has on the legal landscape for freelancers is two fold: 1) It is no longer a futile or “lose-lose” effort to seek recovery of payment in the courts, and 2) Hirer’s are now legitimately deterred from failing to pay, even for small jobs. Here’s why:
Failure to provide written contract, failure to timely pay, and retaliation are now violations of the law in New York City. This means that a freelancer has the option of taking the hirer to civil court and potentially recovering more in damages and expenses than the contract price for the services. For instance, under the statute the hirer may be subject to
a. $250 in statutory damages for failure to have a written contract;
b. Paying the freelancer’s reasonable attorneys fees and costs for taking legal action;
c. The value of the contract, and;
d. An award of double damages to the freelancer if the hiring party fails to pay within the required time, or seeks to pay less than the contracted amount.
Freelancers now have the ability to file a complaint with the City’s Department of Consumer Affairs. If the DCA identifies hirer’s as having a pattern of similar complaints against them, the DCA May itself take action against the offending hirer and impose stiff civil penalties.
The Freelance Isn’t Free Act is not perfect - No law is. However, it does play an important role in leveling the playing field for freelance workers in NYC. If you are a freelancer who has had trouble being paid for work, or if you are a business owner interested in understanding your responsibilities under the law, contact us and we’ll be happy to help.