On May 15, New York City’s “Freelance Isn’t Free Act” took effect. The new law protects freelance workers who live in the city from late payment or non-payment by companies who use their services.

Employers are increasingly utilizing freelancers and independent contractors in the growing “gig economy.” Writers, drivers, personal shoppers, photographers, computer programmers and many others provide services for companies who pay them by the job or task.

These workers are not considered employees, which can have advantages and disadvantages. On one hand, they may have flexible schedules, the ability to be their own boss, and the opportunity to build their own businesses with entrepreneurial skill and hard work. On the other hand, they lack the basic protections the law gives employees—like minimum wage and overtime pay—and are not provided optional benefits like health insurance and paid sick days may employees enjoy. Another major drawback is that freelancers are often underpaid, not paid at all, or forced to wrangle with companies who change the terms of their agreement after the work is done.

Under the new law, which applies to  freelance work with a value of $800 or more (either $800 at once, or a total of $800 when adding together the value of all work performed within 120 days), companies must provide written agreements setting out, among other terms, the services that will be provided, the payment amount, and the payment date. If no payment date is provided, payment must be made within 30 days of completion of the job.

Workers can have their claims heard by city investigators or state courts, and a plaintiff can receive $250 in damages for a single violation. Employers who are found to commit an ongoing pattern of violations could be liable for up to $25,000 in civil penalties, as well as punitive damages and attorneys’ fees.

If you are a freelance or contract worker and you think you haven’t been paid correctly, contact this office for a free consultation.