There is a new law that affects NYC freelance contracts. This law, which went in to effect May 15, 2017, affects everyone who contracts with any freelance workers in NYC. The NYC Freelance Isn’t Free Act (FIFA) makes collecting payment easier for freelance workers and independent contractors. Employers who don’t get agreements in writing or do not make timely payments will be subject to hefty penalties.
At this point you may be wondering if this law applies to you. It does if you are an individual who works as an independent contractor in NYC or an organization with no more than one employee that is compensated for services provided. Whether the hiring person or organization is located in NYC or not does not matter. FIFA does not apply to sales representatives, attorneys, or licensed health care workers. Services over $800, whether a single contract or in multiple agreements, entered during any 120 day period are covered under FIFA.
Any contract covered under FIFA is required to contain, at a minimum, the following information:
- the name and mailing address of both the hiring person or organization and the freelance worker,
- an itemization of all services to be provided by the freelance worker, the value of the services to be provided pursuant to the contract and the rate and method of compensation, and
- the date on which the hiring person or organization must pay the contracted compensation.
Unless otherwise provided by law, the compensation due to the freelance worker shall be paid either on or before the date that such compensation is due under the terms of the contract or if the contract does not specify when the hiring person or organization must pay the contracted compensation, the default is 30 days after the freelance worker’s completion of the contracted services. Once the contracted services have begun, the hiring person or organization may not require the freelance worker to accept less compensation than the contracted amount as a condition of timely payment. FIFA also makes it illegal for the hiring person or organization to retaliate against a freelance worker whether by threats, intimidation, discipline, harassment, denial of a work opportunity, discrimination, or any action taken that penalizes a freelance worker for exercising or attempting to exercise any right guaranteed under FIFA.
There is a complaint procedure to be followed in the case of a freelance worker being subject to a violation of FIFA. The freelance worker may file a complaint within two years of the violation with the NYC Office of Labor Standards (OLS). The complaint shall include, at a minimum:
- the name and address of the freelance worker and the hiring person or organization that violated FIFA,
- a statement detailing the terms of the contract with a copy of the contract if available,
- the freelance worker’s occupation,
- a statement detailing the violations, and
- a signed affirmation that all facts provided in the complaint are true.
The freelance worker or the city is allowed to bring a civil lawsuit in under FIFA. There are penalties available to the freelance worker which include $250 for failing to provide a written contract to double the amount due for failing to make a timely payment, plus attorney’s fees. If a hiring person or organization has been found to engage in a pattern or practice of violating FIFA, a civil penalty up to $25,000 may be imposed, which will be recovered by the city.
In order to avoid the possibilities of a civil penalty, a hiring person or organization must make sure that all agreements with freelance workers and independent contractors are in writing and that they include a good description of the work to be performed by the freelance worker, details in regards to the date the contracted payment is due and how it will be made in a timely manner, and all relevant contact information for all parties involved.