New York City’s new Freelance Isn’t Free Act goes into effect on May 15, 2017. The Act is designed to assure that freelancers are paid for their work in a timely fashion.
The main provisions of the Act require a written agreement, the right to be paid timely and in full, and the right to be free of retaliation.
The Act applies to a natural person (even if incorporated or operating in the form of a limited liability company, so long as the entity consists solely of the one person) who is retained as an independent contractor to provide services in exchange for compensation. The law excludes sales representatives, lawyers and doctors.
If services to be performed during a 120-day period will have a value of $800 or more, then a written agreement is required. The agreement must include names and addresses of the parties, an itemization of the services to be provided, the value of the services, the rate and method of compensation and the date on which the compensation will be paid. If no date is provided, then compensation will be due 30 days after completion of the work. The hiring party may not condition timely payment on the freelancer accepting less than full compensation.
The City’s new Office of Labor Policy and Standards (OLPS) is in charge of enforcement. An aggrieved freelancer may file a complaint with OLPS or bring an action in court. Some penalties may apply for violation of the act. In addition, the City may bring a civil action if reasonable cause exists to believe that a hiring party is engaged in a pattern or practice of violations of the law. Fines of up to $25,000 for violations may apply.