Freelance arrangements can vary greatly from scenario to scenario, making it difficult for standard employment law to be effectively read and enforced in freelance situations. The Freelance Isn’t Free Act seeks to eliminate some of this ambiguity and to establish a more consistent system of protection for freelance workers.
The Freelance Isn’t Free Act of New York
The New York City law known as the Freelance Isn’t Free Act, officially called Establishing Protections for Freelance Workers Act, was enacted to safeguard workers. The law was signed by Mayor Bill de Blasio to increase freelance worker protection.
Workers have the right to make a complaint if their rights are abused under the Freelance Isn’t Free Act. Complaints are filed with the Office of Labor Policy and Standards (OLPS), which then notifies the hiring party, who has 20 days to respond before taking proper action to resolve the matter.
The OLPS also offers freelancers information to assist them to find a lawyer, understand the legal process, and more.
Previously, freelance workers had limited rights, and the laws that were in place only gave unclear requirements at best. This new law was enacted to clear up any uncertainties.
How to Ensure You’re Protected by the Freelance Isn’t Free Act
The Freelance Isn’t Free Act provides freelancers with the best payment assurances in the country. According to the Act, freelancers have the right to sue if their client fails to pay their contract in full on time. If, for example, a customer refuses to pay a freelancer’s $10,000 contract, the freelancer can sue for $20,000 in damages and additional $10,000 for the original contract. The law applies to freelancers who agree to do $800 or more of work for a client in a 120-day period.
Hiring parties must give freelancers a signed contract under the Freelance Isn’t Free Act. To meet the requirements, the contract should include:
- the name and mailing address for both the client and the freelancer
- an itemized list of services the freelancer will provide with the value of those services
- a description of the rate and method of compensation
- the date the freelancer will receive payment. (If the contract does not list a date, the freelancer must be paid within 30 days of completing the terms of the contract.)
New York City provides a sample freelance contract that meets the legal standards. If a hiring party fails to provide a legitimate contract, the freelancer may bring a $250 claim.
Damages Clients Can Pay Under Freelance Isn’t Free Act
Here are some of the reasons why the Freelance Isn’t Free Act is so important for freelancers: the provisions for damages for underpayment, nonpayment, and late payment. As per the Act, freelancers are entitled to double damages if a client fails to pay any part of the contract amount or pays late.
For example, if a client pays $2,500 of a $5,000 contract two days late, the freelancer is entitled to an additional $2,500 in penalties. If a customer fails to pay by $5,000, the freelancer is entitled to the $5,000 owed plus $5,000 in damages.
Damages are increased for freelancers who do not have a valid contract. If the client fails to present a valid written contract and pays late or short, the client must pay the entire contract value as a penalty on top of what they still owe the freelancer.
As a result, if the whole contract value was $25,000, the client must pay the freelancer $25,000 in damages in addition to the $25,000 previously paid. In brief, the Act ensures that freelancers get compensated for their efforts. If they do not, the client may face serious consequences.
The Freelance Isn’t Free Act also includes harsh reprisal restrictions. If a freelancer files a claim under the Act, they are protected against reprisal or harassment. Retaliation might include a client threatening a freelancer, attempting to blacklist the freelancer, or publishing negative reviews to deter the freelancer from pursuing payment.
Every incidence of retaliation results in double damages for freelancers. Consider the following scenario: a freelancer makes a claim for nonpayment on a $10,000 contract, and the client retaliates by threatening to publish a terrible review and encourage others not to hire the freelancer. Both are actions of revenge. For a total of $40,000, the freelancer can receive the original $10,000, $10,000 in damages, and $20,000 for two acts of retaliation.
The Freelance Isn’t Free Act took effect on May 15, 2017, and freelancers can utilize it to seek payment on eligible contracts signed after that date. There is a statute of limitations for bringing claims under the Act. Freelancers who make a claim for illegal payment practices or retribution have six years to file a claim in court, and two years for claims for failing to furnish a valid written contract, though the law does not apply to contracts signed before May 15, 2017.
These rules require companies to be extra vigilant about their contracts and payout practices for any work done in New York to avoid legal issues. Companies that fail to comply with the new regulation will risk fines, legal cases, and a slew of additional complications that will harm their reputation.