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New York State’s Freelance Isn’t Free Act Protects Independent Contractors

Last year, Governor Kathy Hochul signed the “Freelance Isn’t Free” Act (the “Act”) into law.  Originally, the Act was to take effect on May 20, 2024, but will now take effect on August 28, 2024.

In 2016, NYC passed a similar law of the same name.  The New York State version of the law extends those and additional protections to freelance workers throughout the state.

The Act protects freelance workers, who are defined as individuals or organizations, regardless of whether they are “incorporated or employing a trade name”, who are hired or retained to provide services in exchange for at least $800.  (The $800 threshold includes the aggregate value of all the contracts between the parties during the preceding 120 days.)

The Act excludes sales representatives, attorneys, licensed medical professionals, and construction contractors from the definition of freelance workers.

Written Contracts Required

Under the Act, a party who retains a freelance worker to provide any service meeting the monetary threshold discussed above must enter into a written contract with the freelance worker.

At a minimum, the contract must include the following information:

  • Names and mailing addresses of both parties,
  • Itemization of services to be provided by the freelancer,
  • The value of the services to be provided pursuant to the contract,
  • The rate and method of compensation,
  • The date when compensation is to be paid, or the mechanism for determining that date, and
  • The date the freelance worker must submit a list of services performed under the contract to enable the hiring party adequate time to process it for payment by the agreed-upon date.

In cases where no payment date is specified in the contract, the Act makes it unlawful for the hiring party to pay the freelance worker more than 30 days after completion of the services.  The Act also prohibits the hiring party from requiring, as a condition of timely payment, that the freelance worker accept less compensation than the contracted amount.

Hiring parties are required to furnish a copy of the contract to the freelance worker, and hiring parties must retain any contracts for at least six years.  Failure to do so will create a presumption that any terms presented by the freelance worker are the agreed-upon terms.

Retaliation Prohibited

The Act prohibits hiring parties from retaliating against freelance workers for exercising their protected rights under the Act.

Complaints and Remedies

Freelance workers may bring any complaints about hiring parties who violate the Act to the New York State Attorney General. The Attorney General is permitted to bring an action to enjoin any alleged violations by a hiring party and may also assess civil penalties in the following amounts: up to $1,000 for a first violation, up to $2,000 for a second violation, and up to $3,000 for a third or subsequent violation.

As an alternative, freelance workers may file a civil action for damages, including non-payment or retaliation.  A freelance worker who prevails in a non-payment claim could be awarded the amount owed to them, double damages, and injunctive relief, along with attorneys’ fees and costs, and any other appropriate remedies.  A freelance worker who prevails in a retaliation claim could be entitled to statutory damages “equal to the value of the underlying contract” for every violation of the Act’s anti-retaliation stipulation.

Lastly, for freelance workers who file a civil action, the Act permits a civil penalty of up to $25,000 for a finding that the hiring party has engaged in a pattern or practice of violating the Act.

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