Freelance is No Longer Free: New York Says Freelancers Must be Paid | DCR Workforce Blog

Freelance is No Longer Free: New York Says Freelancers Must be Paid

Getting paid as a freelancer has historically been a challenge for many. On the DCR blog, we have asked if gigs are the new jobs, and if so what are the regulatory protections that workers in this new environment will need? We have an answer, with New York’s “Freelance Isn’t Free Act” taking effect on May 15, 2017, to provide protections to freelance workers, who frequently get short-changed out of fair wages due to them, by dissatisfied/deceitful clients.

If you’ve ever heard of or visited the site ‘The World’s Longest Invoice’ put up by the Freelancers’ Union, you could visualize the extent of this scourge which affects about 71% of all freelancers, blighting their efforts and aspirations – with a very few of them in a position to take legal action against the offenders. When we wrote about the topic of unpaid invoices and New York’s proposed Act last year, the tally was $3.7 million, and it has since increased to $4.1 million. Truly a sad state of affairs.

The new rules, on trial for a year, lay down the right of freelancers to:

  • A written contract, with the names and addresses of both parties, for agreements which total $800 or of duration over 120 days, with an itemized list of services, pay for the work with a due date for the payment
  • Payment in full and on time, or within 30 days after completing the services under the agreement, in the absence of a specific date for payment
  • Freedom from retaliation and a right to sue the hiring party to seek damages at double their unpaid dues along with legal expenses, as well as damages for failing to enter into a contract

No more free lunch

The law establishes other complaint mechanisms and remedies for any violations of a freelancer’s right to payment, and defines a freelancer as a natural person (or an organization composed of no more than one natural person), who is hired or retained as an independent contractor to offer services against compensation. Payment must be made on or before the date specified in the contract or before completing 30 days from the date of completion of the services contracted for. The hiring party may not reduce the payment, so as to pay the dues on date. The act provides for damages, statutory damages, double damages and injunctive relief depending on the violation with the penalties alone touching $25,000 for repeat offenders.

At least 500,000 New Yorkers, who file 1099-Misc tax forms as independent contractors stand to benefit from this Act which protects them from suffering financial hardships on account of unpaid wages, when they face fixed expenses on office space, utilities, equipment, its maintenance, their own vendors and other operating costs.

New York is the first city to establish such a law to protect the rights of freelancers to fair wages on time and it’s high time more cities and states followed suit.

The way workplaces are going, there is a need to speed up this process and see that other freelancers are also afforded equal protections from wage theft. We look forward to hearing from any New Yorkers who benefit directly from this Act.

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.