New York City Freelancer Protection Law Comes into Effect

New York City Freelancer Protection Law Comes into Effect

The “Freelance Isn’t Free Act” passed by the New York City Council last October came into effect on Monday. The law entitles freelancers to a written contract when they have a relationship with a private sector business that pays them at least $800 within four months, and to damages if they request a contract and are denied one, or if the business fails to pay them on time or retaliates against them for asserting their rights under the law. At JD Supra, Bond Schoeneck & King attorney Richard Kass explains the new penalties New York City businesses could face:

There is no penalty for simply failing to provide a contract. Penalties are imposed only if the hirer refuses to provide a written contract after the freelancer requests one. It would be prudent, though, for hirers to provide written contracts to freelancers as a matter of routine.

The penalty for failing to provide a written contract upon request is $250. The penalty for failing to pay a freelancer as promised is double damages. The penalty for retaliation is the value of the contract. In each type of case, the freelancer’s attorneys’ fees can also be awarded. Hirers who are found to have engaged in a “pattern or practice” of violating this new law can be fined up to $25,000.

Hodgson Russ attorneys Peter Godfrey, John Godwin, and Emina Poricanin provide a detailed breakdown of the finer points of the Freelance Isn’t Free Act, also at JD Supra. One potentially thorny issue is how the new law will affect employers from outside New York who contract with freelancers living in the city, who in theory are covered by its protections. Gothamist’s Emma Whitford asked the law’s author and a local employment lawyer about that back in November:

[Councilmember Brad] Lander said that the law should cover most New York City freelancers, even if the employer is based in, say, Albany, or even another state. “Probably, if you live here, if you are doing the work here, someone out of state who hired you has to comply with our laws,” he said. “Now, the reverse in many cases might not be true—if a New York company is hiring a freelancer in Abu Dhabi, that person probably does not have a claim under the Freelance Isn’t Free act.”

“If you are in New York and performing the work in New York it would be expected that an employer hiring in New York abide by the [city’s] laws,” [attorney Benjamin] Dictor concurred. “But it does raise some interesting potential issues when you think of the way it works in the modern world—hiring people over the internet.” Dictor anticipates litigation with employers who might not realize they are hiring people who live and work in New York City.

While contractors who sue and win under the law are entitled to double damages plus attorney fees, many freelancers don’t have the time or money to find and pay someone to litigate their case in the first place. That’s why the Freelancers Union is rolling out a new tool to help connect them with lawyers, Whitford reported yesterday:

In an effort to smooth this road, the Freelancers Union today launched the Freelancers Union App to connect workers with attorneys who both specialize in small claims, and are eager to take on these types of cases. “We had so many freelancers reaching out to us looking for attorneys that want to represent them, and realized that those can be hard to find,” spokeswoman Caitlin Pearce told Gothamist last week. “And many of our members are attorneys who see this as key to their business.”

The app launches today as a pilot, with about 30 attorneys active in the NYC area, according to Pierce. And while the union isn’t involved in brokering the agreement between attorney and client, in general, they said, attorneys in this field tend to take cases on contingency.