NYC Passes Freelancer Law
December 26, 2016
by Jerry Glover
New York City has passed an ordinance which governs the use of freelancers. Known as the Freelancer Isn’t Free Act, the law tries to assure that freelancers and those who hire them will enter into a written agreement and that that agreement will be honored. This law governs many industries that rely heavily on freelance talent, but it is important for the New York City entertainment industry since so many people hired to perform or provide specialized services in that business often depend on the kindness of their “employers” for payment without any written evidence of the agreement they entered into with those employers. And they aren’t A-list so they can’t usually demand written agreements.
The law defines “freelance worker” an “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.” Sales people, people engaged in the practice of law and licensed medical professionals are exempted from the law. A “hiring party” is any person who retains a freelance worker to provide any services (with certain exceptions for government agencies).
The New York City law requires anyone retaining the services of a freelance worker to enter into a written contract if the services are valued at $800 or more (either alone or when aggregated with all contracts for services between the hiring party and the freelancer during the immediately preceding 120 days). Each party is to retain a copy of the written agreement. These written contracts, at a minimum, must contain the following:
–The name and mailing address of each party;
–An itemization of all services to be provided;
–The value of the services to be provided;
–The rate and method of compensation;
–The date that the freelancer must be paid or a mechanism that will determine that payment date. If no date or mechanism is stated, then the hiring party must pay the freelancer within 30 days after completion of services.
The law also states that a hiring party cannot force a freelancer to accept a lower payment that specified in the contract after the work has commenced performance.
The City’s Office of Labor Standards will hear complaints by freelancers; however, a freelancer can, instead, file a claim in court oversees complaints filed by freelancers against the people that hired them. A freelancer who prevails on his/her claim can be awarded statutory damages totaling $250 if the claim involves failure to provide a written contract or include all the required contractual provisions in the agreement. If a complaint alleges a claim based on failure to follow the provisions of the law relating to written contracts and alleges another claim that the law has been violated, then the freelancer, if successful, will be awarded damages equal to the value of the contract. Double damages may be available if the freelancer can show that he/she was not paid or that the payment was late.
Some may argue that this law just sets up another bureaucratic log jam that may do nothing but keep city employees busy. But if city employees are kept busy as a result of this law, it means the law’s reason for being is real. This law is an attempt to solve a legitimate problem that hundreds of people, without much bargaining power, are confronted with.