New York City To Make History With New Legislation Protecting Independent Contractors

On May 15, 2017, New York City’s Freelance Isn’t Free Act (“FIFA”) will take effect, and make history as the first law of its kind. FIFA establishes significant protections for freelance workers, or independent contractors by requiring a written contract, timely payment and anti-retaliation provisions. The law will provide many of the protections afforded to employees and will almost certainly attract the attention of plaintiffs’ attorneys eager to represent those who believe they have claims.

Under FIFA, companies must provide independent contractors with written contracts for all arrangements valued at more than $800. Further, the written agreement must include the parties’ names and addresses; a list of each of the services contracted for, as well as the value of each service; the rate and method of compensation; and the payment date or a mechanism to determine such date (which may not be later than 30 days after the work is completed).

The Act also prohibits companies from retaliating against freelancers for demanding a written contract from a potential employer, filing a complaint or otherwise seeking to enforce the rights afforded to them under FIFA.

FIFA further provides that all complaints must be filed with the New York City Office of Labor Standards (“OLS”) within two years of the alleged violation.  Companies who are found to have violated any or a combination these provisions will be liable for damages (based on the type of violation) as well as reasonable attorneys’ fees and costs. Failure to enter into a written contract entitles independent contractors, who sought to obtain a contract and were denied, to a $250 award. Failure to make a timely payment will entitle the freelancer to an award of double the contract price. Failing to comply with both the contract and timely payment provisions would result in an award of both the contract price and an award of double damages. Additionally, a contractor who prevails on a claim for retaliation may receive the value amount of the contract for each instance of retaliation. Most significantly, the City may also bring a civil suit against a party engaged in a pattern of violations and seek up to $25,000 in civil penalties.

FIFA is clearly designed to negate some of the perceived unfair advantages to companies engaged in the so-called “gig economy” which relies heavily on the contingent workforce.  Companies of all sizes should take immediate steps to ensure they are compliant with this new groundbreaking law.