New York City recently adopted the Freelance Isn’t Free Act (“FIFA”), granting freelance workers the right to a written contract, timely payment, and to be free from retaliation. The new law will take effect on May 15, 2017.
Under the new law, freelance workers are defined as “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.” The definition explicitly excludes commissioned salespersons, lawyers, and doctors.
First, pursuant to FIFA, when a hiring party engages a freelance worker for a job that has a value of $800 or more, either by itself or when aggregated with all agreements between the parties during the preceding 120 days, the parties must execute a written contract that includes the names and addresses of both parties, an itemization of services to be provided, the value of the service to be provided and the rate and method of compensation, and the date on which the compensation is due or method by which the date will be determined.
Second, FIFA requires that the freelance worker be paid on or before the agreed upon date, or in cases where the date of payment or method of determining such date was missing from the contract, no more than thirty (30) days after the completion of services. The law also prohibits the hiring party from conditioning timely payment on less compensation than previously agreed.
Third, the law includes an anti-retaliation provision, which prohibits discrimination, threats, intimation, discipline, harassment, and the denial of future work opportunities because the freelance worker has made a complaint under the law.
Remedies and Damages
There are therefore three types of violations under FIFA: (1) violation of the written contract requirement; (2) violation of the payment requirements; and (3) violation of the anti-retaliation provision.
Freelance workers alleging violations of FIFA may file an administrative complaint with the New York City Office of Labor Standards within two (2) years of the alleged violation or may proceed directly to court. Any civil action in court alleging a violation of the written contract requirement must be brought within two (2) years while a civil action alleging a violation of the payment requirements or the anti-retaliation provision must be brought within six (6) years.
With respect to monetary damages, failure to provide a written contract would subject the hiring party to statutory damages of $250, but if the hiring party also violated the timely payment and/or anti-retaliation provision, those damages could be increased to equal the total value of the contract. Moreover, a hiring party that fails to make a timely payment would be liable for double damages, and a hiring party that retaliates against a freelance worker would be liable for the full value of the contract. Successful plaintiffs would also be entitled to attorney’s fees and costs.
Lastly, the New York City Corporation Counsel has the right to bring an action against a hiring party who has engaged in a “pattern or practice” of violations which could result in a civil penalty of up to $25,000.
If you are a freelance worker who has not been paid for services performed, it’s best to immediately consult with a New York City employment attorney to assess and determine all of your legal rights.