New Rules Prohibit Waivers of Rights and Clarify the Scope of Coverage

The New York City Department of Consumer Affairs has released final rules under the Freelance Isn't Free Act ("local law"), which establishes protections for certain individuals hired or retained as independent contractors ("freelance workers"). Key provisions of the rules are presented below.

Waivers of Rights Prohibited
The final rules provide that any contract entered into by a hiring party (i.e., a non-governmental entity/person who retains a freelance worker to provide any service) and freelance worker may not include any prospective waiver or limitation of rights under the local law. Any such waiver or limitation is invalid. If a contract includes language that waives or limits a freelance worker's right to participate in or receive money or any other relief from any class, collective, or representative proceeding, the waiver or limitation is void.

Wherever a hiring party asks a freelance worker to waive or limit (via contract) any other procedural right normally afforded to a party in a civil or administrative action, any such contractual waivers and limitations are void under section 20-935 of the NYC Administrative Code. (Such rights include but are not limited to procedural rights of parties to a civil action.) Additionally, a freelance worker has the right to disclose the terms of a contract with a hiring party to the NYC Office of Labor Policy & Standards (OLPS). Any private contractual agreement that purports to waive or limit a freelance worker's right to communicate the terms of such a contract to the OLPS is void.

Scope of Coverage and New Definition
Under the rules, a freelance worker is entitled to the protections of the Freelance Isn't Free Act, regardless of immigration status. Retaliation includes (but is not limited to) any adverse action relating to perceived immigration status or work authorization.

The rules define the term "adverse action" as any action by a hiring party, their actual or apparent agent, or any other person acting directly or indirectly on behalf of a hiring party, that would constitute a threat, intimidation, discipline, harassment, denial of a work opportunity, or discrimination, or any other act that penalizes a freelance worker for (or is reasonably likely to deter a freelance worker from) exercising or attempting to exercise any right guaranteed under the local law. Additional provisions regarding retaliation and contract value are outlined in the final rules.

Background
The local law, which is currently in effect, establishes and enhances protections for freelance workers, including, among other things, the right to a written contract and the right to timely payment.

Under the local law, whenever a hiring party retains the services of a freelance worker, the 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 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.

The final rules are effective on July 24, 2017. The final rules and local law are available for download. A model contract, FAQs, and a brochure are available by clicking here.

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