Effective May 15, 2017, freelance workers in New York City will have new legal rights under the Freelance Isn’t Free Act (“FIFA”), a new law enacted by the New York City Council and signed by Mayor DeBlasio on November 16, 2016. FIFA provides that when a company retains the services of a freelancer for a value of $800 or greater, the freelancer must be given a written contract. The law is intended to make it easier for freelancers to collect payment for their services at the agreed-upon rate and in a timely manner.
FIFA defines “freelance worker” as any individual or an organization composed of no more than one individual that is retained as an independent contractor to provide services for compensation. This means that if your business retains the services of a vendor made up of more than one person, the engagement would not come under the Act. But if a business retains the services of a single person as an independent contractor rather than an employee, or a single-member LLC or a corporation comprising only one person, the engagement will be governed by FIFA.
Any written contract entered into under the new law must include the following information:
Name and address of freelance worker of the hiring party and the freelance worker;
An itemization of services to be provided, their value and the rate and method of compensation; and
The date on which payment will be made or the mechanism by which the payment date will be determined.
Regarding the timing of payments to freelancers, FIFA further provides that freelancers must be paid by the date stated in the contract or, if the date is unspecified, no later than 30 days after completion of the contracted-for services.
In addition, FIFA prohibits retaliation against a freelance worker for exercising his rights under the law, including by refusing to provide work to the freelancer in the future because the freelancer has done so. A freelancer may exercise his rights under FIFA by filing a complaint with the director of the office of labor standards and/or bringing a lawsuit, in which the freelancer may be awarded double damages as well as attorney fees.
Accordingly, businesses who in the past have enjoyed informal arrangements with freelancers must begin formalizing those arrangements starting May 15, 2017. However, the Act will not apply retroactively to arrangements entered into prior to that date.