We’re not even out of 2023, and New York employers who engage independent contractors already have new obligations to reckon with before next spring. On November 22, 2023, New York Governor Kathy Hochul signed the New York State “Freelance Isn’t Free Act”, increasing obligations for parties who engage freelance workers (including independent contractors). Starting May 20, 2024, hiring parties (including employers who engage independent contractors) must provide freelance workers with written contracts, pay them within a specified time period, maintain records, and satisfy additional new obligations—and freelance workers will gain a private right of action for violations.
The Act replicates the 2017 NYC’s Freelance Isn’t Free Law, adding administrative oversight and support from the New York State Department of Labor and the New York State Attorney General while maintaining New York City’s local law. The Act will apply to contracts entered into on or after the May 20, 2024 effective date.
Here are some key details:
Definitions: “freelance workers” and “hiring parties”
The Act defines a “freelance worker” as “any natural person or organization composed of no more than one natural person, whether or not incorporated or employing a trade name, that is hired or retained as an independent contractor by a hiring party to provide services in exchange for an amount equal to or greater than eight hundred dollars”—but does not include certain sales representatives, practicing attorneys, licensed medical professionals, and construction contractors. Also, a “hiring party” is any person (other than government entities) who retains a freelance worker to provide any service.
Written contracts required
The Act requires a written contract if the freelance work is worth at least $800, inclusive of multiple projects over a 120-day period. The hiring party must furnish a copy of the contract, either physically or electronically. At a minimum, the written contract must include:
- The name and the mailing address of both the hiring party and the freelance worker;
- An itemization of all services to be provided by the freelance worker, the value of the services to be provided under the contract, and the rate and method of compensation;
- The date on which the hiring party must pay the contracted compensation (or the mechanism by which the date will be determined); and
- The date by which a freelance worker must submit to the hiring party a list of services rendered under the contract to meet the hiring party’s internal processing deadlines to allow compensation to be paid by the agreed-upon date.
The New York State Department of Labor will provide model contracts on its website for freelancers and hiring parties to use.Continue Reading More Scrutiny and Obligations for NY Businesses Engaging Independent Contractors Coming Spring 2024