New York City Law Provides Certain Protections for 'Freelance' Workers

New Law Effective May 15, 2017

A new law enacted by the New York City Council, effective May 15, 2017, establishes and enhances protections for freelance workers, including, among other things, the right to a written contract and the right to timely payment.

Freelance Worker Defined
The term "freelance worker" means any natural person or any 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 compensation. The term does not include certain sales representatives and lawyers.

Written Contract Required For Service Contracts of $800 or More
Under the new law, whenever a hiring party retains the services of a freelance worker, the service contract between the hiring party and the freelance worker must be reduced to writing if the contract between the parties has a value of $800 or more, either by itself or when aggregated with all contracts for services between the same hiring party and freelance worker during the immediately preceding 120 days.

The new law also provides that the written contract must include, at a minimum, certain information, including an itemization of all services to be provided by the freelance worker and the value of the services to be provided pursuant to the contract.

Compensation Arrangements
Under the new law, the contracted compensation must be paid to the freelance worker on or before the date such compensation is due under the terms of the contract. If the contract does not contain a payment date or mechanism by which the date will be determined, payment must be made no later than 30 days after completion of the freelance worker's services under the contract.

Additional Information
The law contains additional provisions regarding anti-retaliation and complaint procedures, as well as exemptions from coverage. The effective date of the new law is May 15, 2017. The new law applies only to contracts entered into on or after the effective date. To read the text of the new law, please click here.

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