In recent months, both New York and California have implemented new legislation aimed at enhancing protections for freelance workers. These laws, known as the Freelance Isn’t Free Act (NYS FIFA) in New York and the Freelance Worker Protection Act (FWPA) in California, mandate written contracts, timely payments, and essential recordkeeping for freelancers hired as independent contractors. The goal of these regulations is to ensure fair treatment and safeguard freelancers’ rights in an economy where freelancing has become increasingly common.
The New York Freelance Isn’t Free Act (NYS FIFA)
On November 22, 2023, New York Governor Kathy Hochul signed the statewide Freelance Isn’t Free Act (NYS FIFA), which builds on a similar law that has been in effect in New York City since 2017. NYS FIFA requires a written contract between the hiring party and the freelancer whenever the project exceeds a total of $800, even if that amount is reached through multiple smaller projects over a 120-day period. The contract must outline the names and addresses of both parties, a description of the services, payment terms, and the date or method by which payment will be issued.
NYS FIFA explicitly excludes certain professions, such as attorneys, licensed medical professionals, sales representatives, and construction contractors, from its definition of freelance workers. However, it covers all hiring entities, regardless of size, and includes penalties for late payment or harassment of freelancers. Businesses failing to comply with NYS FIFA’s requirements may face fines, as freelancers are entitled to pursue claims through the New York State Department of Labor (NYSDOL) or in court, where they may recover damages, attorneys’ fees, and other legal remedies.
The California Freelance Worker Protection Act (FWPA)
Similarly, California’s Freelance Worker Protection Act (FWPA), signed into law by Governor Gavin Newsom in September 2024, will go into effect on January 1, 2025. Under this law, private employers contracting with freelancers for services valued at $250 or more are obligated to establish a written agreement detailing the service terms. This law applies specifically to services categorized as “professional,” including areas such as graphic design, writing, photography, and editing, among others. The law mandates recordkeeping for a minimum of four years, during which employers must retain copies of all contracts with freelance workers.
California’s law goes further in offering freelancers legal recourse for non-compliance. If a hiring entity refuses to provide a contract or fails to pay the freelancer within the agreed time, freelancers can file lawsuits to recover double damages, along with potential penalties of up to $1,000 for a contract refusal.
Compliance Requirements for Employers
Both the NYS FIFA and CA FWPA specify that businesses hiring freelance workers must adhere to four main requirements:
Written Contracts: Employers must formalize service agreements in writing when contracts exceed $800 in New York or $250 in California.
Timely Payment: Freelancers must be paid by the specified date in the contract or, if unspecified, within 30 days after completion.
Recordkeeping: California requires retention of contract records for at least four years, while New York mandates a six-year period.
Non-Discrimination: Freelancers are protected from retaliation if they exercise their rights under these laws, shielding them from harassment, threats, or discriminatory practices.
Penalties for Non-Compliance
The laws in both states provide freelancers with tools for enforcing their rights. In New York, freelancers may recover double the unpaid amount, and businesses face fines up to $25,000 for repeated violations. In California, a freelancer denied a contract may be awarded $1,000, and if payment is delayed, damages can reach twice the due amount. California law further allows freelancers to pursue injunctive relief and reasonable attorneys’ fees if legal action is necessary.
Both NYS FIFA and CA FWPA represent significant steps forward in recognizing the rights of freelance workers and ensuring that businesses prioritize transparency and fairness. With the growing number of individuals in the freelance workforce, such legislation could set a precedent for other states to follow, establishing fairer practices for freelancers across the U.S.
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