With overwhelming support from the New York City Council, Mayor Bill de Blasio signed into law the “Freelance Isn’t Free” Act which provides extensive rights to the freelancers who help keep NYC running strong. The Act signifies a major change in how independent contractors will be treated by providing them certain protections previously extended only to employees.
The Act requires written agreements between freelancers and the entities that engage them for services worth $800 or more. The Act mandates that freelancers be paid on or before the dates agreed upon in their contracts. If a contract is silent as to payment terms, the Act requires that the freelancer be paid in full within 30 days after rendering their services. These provisions are monumental since a nationwide survey reported that 71% of such freelancers have encountered difficulties getting paid in a timely manner and have been forced to accept partial payments in lieu of their full compensation. Such freelancers are underpaid by an average of $6,000 annually, with little to no legal recourse. To combat this epidemic, the Act imposes penalties and provides for a private right of action against entities that fail to comply with the payment terms of a contract and the requirements of this Act.
The Act also explicitly protects freelancers from retaliation by making it illegal to harass, intimidate or threaten freelancers from exercising their rights under the Act. The Act establishes a complaint process within the newly created Office of Labor Standards for freelancers to bring claims against the entities that engage them to enforce their rights.
The “Freelance Isn’t Free” Act is a game changer for the freelance community, especially in NYC where there are over four million documented freelancers at any given time. This often underrepresented group of artists, designers, and technicians serve as the backbone of critical industries that drive this city. The Act becomes effective in 180 days and will provide these freelancers with a meaningful recourse against entities who fail to pay them their full wages in a timely manner.
Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, employment law, wage and hour, and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Delaware and Pennsylvania.
Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, consumers and employees.
Innessa Melamed is an Partner at Faruqi & Faruqi, LLP’s New York office and focuses her practice on employment law and wage and hour class action litigation.
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