On August 28, 2024, the Freelance Isn’t Free Act (or “FIFA”) goes into effect in New York. Passed into law earlier this year, and initially scheduled to take effect on May 20, 2024, the law creates protections for freelance workers in New York State.
FIFA’s protections can be divided into four general categories: (1) written contract requirements; (2) timely payment of compensation; (3) recording keeping; and (4) anti-discrimination. FIFA defines “freelance worker” broadly, applying the term to any individual or entity hired as an independent contractor to provide services in exchange for $800 or more. The $800 can be earned from a single project or the aggregate of multiple projects within a 120 day period.
While the definition of “freelance worker” is broad, four types of workers – sales representatives, legal professionals, medical professionals and construction contractors – are specifically excluded from the definition.
Under FIFA, the individual or entity hiring the freelance worker – referred to as the “hiring party” – is required to enter into a written contract with the freelance worker. There are no exceptions to the definition of a “hiring party” except the federal government, state government, and municipalities.
At a minimum, the contract must (i) include the parties’ names and mailing addresses; (ii) itemize the freelance worker’s services; (iii) identify the value of the services, the rate and method of compensation, and the date on which the freelance worker must submit a list of services rendered to the hiring party so that it can make timely payment; and (iv) identify the timeframe in which the freelance worker must receive payment.
FIFA specifically requires payment to a freelance worker to be made on or before the date it is due or, if the date is unspecified, no later than 30 days after completion of the freelance worker’s services.
The Commissioner of the New York State Department of Labor is empowered to enforce the provisions of FIFA, including not only the contract and payment provisions described above, but also the recording keeping and anti-discrimination provisions.
Regarding FIFA’s recording keeping requirements, hiring parties must keep a record of all freelance worker contracts for a minimum of six years. If a hiring party fails to keep a record of a contract, the Commissioner will presume that the contract contained the terms as described by the freelance worker.
Hiring parties are also prohibited from discriminating against or retaliating against a freelance worker in an effort to deter the worker from seeking FIFA protections.
FIFA empowers freelance workers to bring complaints before the Commissioner for any FIFA violation. Additionally, freelance workers may also file lawsuits alleging FIFA violations. Depending upon the basis for the complaint or lawsuit, a freelance worker prevailing in such action may receive damages equal to the value of the underlying contract, double damages, attorneys fees and even injunctive relief. FIFA also empowers the Commissioner to issue monetary fines to a hiring party demonstrating a pattern of FIFA violations.
For the text of the Freelance Isn’t Free Act, go to https://www.nysenate.gov/legislation/bills/2023/S5026.