Ping® by Adlerlaw Reminder: NYC Requires Written Contracts For Freelance Workers
If you employ independent contractors in New York City (NYC), you may need to have written contracts with your workers. Since May 15, 2017, NYC’s Freelance Isn’t Free Act (the “Act” or “FIFA”) established and enhanced protections for freelance workers, a/k/a “independent contractors.” The Act provides the right to a written contract between the hiring party and the contractor, the right to be paid timely and in full, and the right to be free of retaliation. The key terms that must be included in the written contract are (1) the work to be performed, (2) the pay for the work, and (3) the date payment will be made. The contractor and the hiring party must keep a copy of the written contract.
The Act establishes penalties for violations of these rights, including statutory damages, double damages, injunctive relief, attorney’s fees, and other such remedies as may be deemed appropriate. Where there is evidence of a pattern or practice of violations, the NYC Corporation Counsel may bring civil action to recover, civil penalties up to $25,000 against the hiring party.
The hiring party must pay the contractor for all completed work. A contractor must receive payment on or before the date that is in the contract. If the contract does not include a payment date, the hiring party must pay the contractor within 30 days after the contractor completes the work.
It is illegal for a hiring party to penalize, threaten, blacklist, or otherwise deter workers from exercising their rights under the Freelance Isn’t Free Act. Denying a worker future work and threatening to take unwarranted legal action against a worker are also illegal. The contractor can file a complaint with DCWP about retaliation by submitting a complaint form.
The contractor can file a complaint with DCWP.
The Act requires a written contract whenever a contract for freelance services has a value of $800 or more (either by itself or when aggregated with contracts made between the same parties in the immediately preceding 120 days). The written contract must include, at a minimum, the following terms:
The requirement for a written contract is satisfied by any writings, such as “an e-mail, a letter, an advertisement or a text message, or some combination of those,” that meet New York State law requirements.
New York law does recognize the enforceability of oral contracts and the Act addresses these situations as well. Even if there is no written contract, the hiring party must pay the contractor within 30 days after completion of the project, no matter when the invoice was rendered. Once services have commenced, the hiring party cannot defer payment in threat of a reduced payment. Finally, if a hiring party doesn’t provide a proper contract, this automatically entitles the contractor to a $250 award. Combination of failures and/or abuses of FIFA subject the hiring party to the aforementioned damages, relief, remedies and/or penalties.
FIFA specifically exempts from its definition of a freelance worker sales representatives, lawyers, and licensed medical professionals. However, the law specifically does not address how to determine whether an individual is legally classified as an employee or an independent contractor.
Still Have Questions?
The above note does not constitute legal advice; it is intended for general information only. If you have any questions about using, writing, or enforcing contracts, please contact David M. Adler using our contact form.
Click here if you wish to view the entire FIFA act, as published by NYC.