With the “Freelance Isn’t Free” Act, NYC Administrative Code § 20-927, et seq., coming into effect this week, New York City workers are better equipped to receive proper payment and protection from prevalent wage theft practices by employers. A skyrocketing number of freelancers, who steadily dominate today’s on-demand service economy, no longer have to worry that their status as independent contractors will impede their ability to receive full payment for their work in a timely manner. Employers are now required to pay both liquidated damages and attorneys’ fees if they refuse to offer freelancers a written contract or are late in providing compensation to freelancers that fall under the act.
Under the statute, a freelancer is 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 act affords freelance workers three major rights when providing any type of service to any private person or entity:
Significantly, the Act establishes an enforcement mechanism that provides for statutory penalties in addition to recovery of unpaid wages. The inclusion of statutory penalties, and the provision shifting the burden of paying a freelancer’s attorneys’ fees to an employer that violates the Act, substantially increases the amount of damages that a worker can recover and provides a meaningful deterrent to employers exploring ways to reduce their labor costs.
Extensive protections will now be extended to over four million freelancers in New York City who work in critical industries like construction, advertising, music, manufacturing, fashion, and film. Further, the Act applies to independent contractors operating on their own within the gig economy, including for such companies as Uber, Lyft, Postmates, and TaskRabbit. According to a recent survey by the Freelancers Union, more than 70% of freelancers have struggled to collect payment at some point in their careers. This Act aims to solve this problem, and serve as a model for other cities and states to adopt in the near future.
About Faruqi & Faruqi, LLP
Faruqi & Faruqi focuses on complex civil litigation, including securities, shareholder derivative actions, merger litigation, antitrust, employment law, wage and hour, and consumer class actions. The firm is headquartered in New York, and maintains offices in Delaware, Pennsylvania, and California.
Since its founding in 1995, Faruqi & Faruqi has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, consumers and employees.
About Innessa Melamed Huot
Innessa Huot is a Partner at Faruqi & Faruqi's New York office and focuses her practice on employment law and wage and hour class action litigation.
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