The ‘gig economy’ is changing how people think about freelancing and NYC is at the forefront of this shift. On October 27th, the New York City Council unanimously passed the first bill in the country to create legal protections for freelance workers: the Freelance Isn’t Free Act.
While the law will change how companies work with freelancers, this is great news for all since it will ensure freelancers receive a fair wage and job security.
Here are the main takeaways that you need to know about the bill before Mayor de Blasio signs it into law:
1. Create unique contracts.*
Hiring companies must create contracts with their freelancers if they will be paying them $800 or more for a project. The contracts must include the names and addresses of the hiring company and the freelancer, an itemization of services the freelancer will provide, the value of those services, the method of payment, and the payment due date.
2. Always pay in 30 days.*
Hiring companies must pay freelancers no later than 30 days after the payment due date on the contract. If there is no payment due date, then they must pay within 30 days after the freelancer completes the services listed on the contract.
3. Don’t offer to pay less to send pay faster.
Hiring companies can’t offer less money than what the contract stipulates in exchange for paying a freelancer faster.
4. Avoid court.
If a freelancer brings a hiring company to court and the judge finds the company guilty, it could be required to pay the freelancer’s legal fees and fined double the amount the freelancer was owed. An employer could even be subject to a criminal misdemeanor charge.
5. Don’t try to retaliate.
A hiring company cannot retaliate against a freelancer for exercising the rights in the bill. Retaliation includes, but is not limited to, threatening, intimidating, disciplining, harassing, denying future work opportunities to, or discriminating against the freelancer.
6. Don’t shrug off an unreported violation.
A freelancer can file a complaint against a hiring company for up to two years after a violation occurs.
7. Keep payment records.*
If a hiring company is sent a complaint, it must provide a written statement and proof that freelancer has been paid in full or written statement that they haven’t and the reasons why within 20 days.
8. Repeated violations mean huge fines.
If a company is repeatedly violates the new law, it can be fined a civil penalty of up to $25,000.
9. Don’t sneak around the rules.
Contracts that try to waive the rights in this act are void.
10. Find the right contract.*
The NYC Department of Labor Standards will add example contracts for to the public on their website after the bill is signed into law.
*The Storyhunter platform ensures compliance with the Freelance Isn’t Free Act. Our system seamlessly creates freelance contracts and automatically pays freelancers within 30 days. Learn more here.