Freelance isn’t Free – New York’s Proposed New Act | DCR Workforce Blog

Freelance isn’t Free – New York’s Proposed New Act

AMOUNT DUE: $3,701,756.28*

This amount is what freelance workers who took the trouble to register their unpaid invoices with the ‘world’s longest invoice’ are owed by employers who neglected to pay them for services already rendered. This situation makes many wonder if calling work freelance makes it free?!

What makes freelance work free and affects freelancers’ rights:

  • Partial payment of advance fees
  • Partial payment for work completed
  • Late payment for work completed
  • Non-payment for work completed
  • Negotiation to lower amount, after a significant delay in payment

Getting paid as a freelancer can be hard

According to a survey, 71% of freelancers find that they did not receive amounts which are their due and on an average they chase payments of nearly $6,390 per freelancer. Among the persecuted freelancers who regularly find the wages of their hard work stolen, we find creative workers, cab drivers, graphic designers, domestic workers, accountants, writers, adjuncts, laborers and cleaners. It does not need much effort to figure out the struggles a freelancer has to go through when they face issues with payments due to them. As business owners, they have fixed expenditures in rent, office equipment, maintenance and operating costs as well as payments to people who work for them. There’s also the question of making ends meet at the personal level.

Understandably, only approximately 5% of freelancers take such delinquent clients to court to recover their dues, and many times the amount involved may not warrant the cost of hiring an attorney and paying for the legal costs though the freelancer has every right to fight for the dues, having worked hard to earn them with a freelance contract in hand to confirm their right to the dues. Now the New York City Council has proposed a new bill 1017-A to set the matter right, and of 51 council members, 27 members have already signed it. The bill is also known as the Freelance Isn’t Free Act!

Let’s look at the protections and options offered by this bill to the city’s freelancers:

  • Any person or company who hires a freelance worker has to execute a written contract that describes what work is to be performed, the rate and method of payment as well as when payment is due.
  • Payment in full must be made within 30 days of the completion of services or of the payment due date under the contract, whichever is later.
  • The bill may be enforced by the Office of Labor Standards or such entity as the mayor may designate or through a private cause of action.
  • The bill also creates an administrative enforcement procedure through the Department of Consumer Affairs, which could offer mediation or assess civil penalties.
  • The bill also creates an administrative enforcement procedure through the Department of Consumer Affairs, which could offer mediation or assess civil penalties.
  • Penalties may include double damages, attorney’s fees and civil penalties for an employer, if found guilty.

How much protection does the freelancer get under the Act?

Of course, agreements alone cannot ensure that the quality of work and the performance of the freelancer are being assessed dispassionately and the non-paying client is deliberately acting delinquent and violating the contractual terms. It may not be easy to assess, evaluate the facts or mediate claims and counter-claims to enforce the bill’s provisions without taking the matter to court. Freelancers will now have access to model contracts which will prove binding on both parties and lay out the rights and responsibilities of the client (employer). An aggrieved freelancer can now have access to legal resources to address the labor dispute, with an assurance that the legal costs will also be paid by the erring client.

Since the Department of Consumer Affairs (DCA) alone has been known to resolve 70% of cases reported to it, it’s safe to assume that most cases would be resolved with the DCA’s involvement and reaction, bringing hitherto unseen accountability into the relationship between a freelancer and their client/employer. Around the world, the rights of temporary workers are definitely much better protected than they are in the USA.

What do you think? Do you feel that this Act is long overdue and needs to be replicated by other States too? Or do you think it will not achieve much and the wage theft from freelancers will continue unchecked?

*Amount was current when this post was written. Sadly, it increases daily and sometimes hourly.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.