The Freelance Isn't Free Act:
The NYC Law Protecting Freelance Workers and Independent Contractors.
New York City implemented the Freelance Isn’t Free Act (“FIFA”), a somewhat novel law which creates certain protections for freelance workers and independent contractors. Freelance workers likely includes gig workers, independent contractors, subcontractors, and consultants.
WHAT PROTECTIONS DOES FIFA PROVIDE:
FIFA requires that persons and companies employing freelance workers provide these workers with:
A written contract
The freelancer's full payment
Protection from retaliation
WRITTEN CONTRACT REQUIREMENTS:
Under FIFA, contracts with freelance workers worth at least $800 must be in writing. The written contract must include an itemization of the services that the freelancer will provide, the amount of pay the freelancer will receive and the method of payment, and the date the freelancer will be paid. The contract must also include the name and mailing address of both the hiring party and the freelance worker.
PENALTIES FOR LATE PAYMENTS TO FREELANCE WORKERS:
If the contract does not specify the date on which the freelancer is to be paid, then the freelancer must be paid no later than thirty days after the freelance worker completes the services under the contract. FIFA specifically forbids a hiring party from demanding or requiring a freelance worker to accept less than the agreed upon amount as a condition of receiving payment.
A freelancer who successfully sues a hiring party for a violation of the late payment provision is entitled to an award of double damages.
OTHER PENALTIES AND DAMAGES:
A freelancer who successfully sues solely for a violation of the written contract requirement can recover $250 as a statutory penalty. A freelancer who successfully sues on a violation of the written contract requirement as well as any other FIFA violation is entitled to damages equal to the underlying amount of the contract. Freelance workers who successfully sue under FIFA are also entitled to reasonable attorney’s fees and costs.
Lastly, FIFA also prohibits hiring parties from retaliating against freelance workers because such freelancer worker has exercised a right guaranteed to them under FIFA. The law defines retaliation somewhat broadly, including any action that “penalizes a freelance worker for, or is reasonably likely to deter a freelance worker from” exercising a right under FIFA.
GEOGRAPHICAL COVERAGE OF FIFA:
In a recent case before the Supreme Court of the State of New York for New York County, Turner v. Sheppard Grain Enterprises, LLC, the Court held that a consultant who lived and performed his freelance work outside of NYC, but for a NYC based company, was not covered under FIFA. Turner v. Sheppard Grain Enterprises, LLC, 127 N.Y.S.3d 260 (N.Y. Sup. Ct. 2020)The Court reasoned that the purpose of FIFA is to protect people working in NYC. The Court did state, however, that non-residents of NYC who are hired to perform work within NYC would likely be protected by FIFA. The Court further stated that “any analysis under FIFA must consider the fact that many freelancers complete tasks remotely…” which is especially true given the current COVID-19 pandemic.
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