November 10, 2016
Two weeks ago on October 27, 2016, New York City passed the “Freelance Isn’t Free Act,” (the “Act”) which provides legal protections for freelancers. The Act will go into effect 180 days after it is signed by Mayor de Blasio. Prior to this Act, a freelancer’s sole remedy for nonpayment claims was to assert a breach of contract claim in court. Once the Act goes into effect, freelancers will benefit from increased legal protection and employer requirements.
Under the Act, when the value of the services exceeds $800 (which may be aggregated over a 120 day period), employers are now obligated to enter into a written contract which must include a description of the services offered, the rates and methods of compensation, and identified payment dates. Additionally, employers may not condition timely payment on a fee reduction once the freelancer starts working. “Pattern or practice” violators of the Act are also subject to additional penalties of up to $25,000.
Under the Act, freelancers who have not been timely paid have additional remedies. Freelancers can submit a written complaint to the Director of the Office of Labor Standards, who can work with the employer and provide additional legal resources to the freelancer if necessary. Freelancers will also be able to file a claim for nonpayment in court, where they will be entitled to the following damages: (1) any unpaid amounts due under the contract; (2) statutory damages equal to the amount of the contract; (3) double damages; and (4) attorneys’ fees. Freelancers will also be able to file a claim for retaliation in the event an employer interferes with a freelancer’s rights under the Act.
New York City is the first city in the country to pass a law to protect freelancers in this manner.
The full text of the new law can be found here.
This article is intended only as a general discussion of these issues. It is not considered to be legal advice or relied upon. For more information regarding employment law, please contact Reavis Parent Lehrer LLP Associate Allison “Ally” M. Grein, who regularly counsels clients on intellectual property, commercial and employment matters. Ms. Grein is admitted to practice in New York State and United States District Courts for the Southern and Eastern Districts of New York.
Reavis Parent Lehrer Law Clerk Niki Bhargava and 2016 J.D. Candidate at New York Law School co-authored this article.