By Robert G. Brody and William C. Collins
Published in the NY Law Journal October 2, 2024
New York State’s Freelance Isn’t Free Act (FIFA) took effect on August 28, 2024, providing freelance workers with numerous safeguards and remedies. The law ensures freelancers receive written contracts, are appropriately compensated for their services, and do not face discrimination. New York City has had a similar law, under the same name, since May 2017.
Who is covered by New York State’s FIFA?
The law covers all freelance workers, other than sales representatives, attorneys, licensed medical professionals, and construction contractors. “Freelance worker” is defined as an individual or one person organization, that is hired as an independent contractor for an amount equal to or greater than $800.
A “hiring party” simply means any person who retains a freelance worker to provide any service. The US Government, New York Government, municipal governments, and foreign governments are not included in the definition of “hiring party.”
What are the contract requirements?
First and foremost, all contracts between a hiring party and freelance worker must be written. The hiring party is responsible for providing all parties to the contract with a physical or electronic copy, and the hiring party must keep the contract for no less than six years. If the hiring party fails to maintain the contract or fails to present it to the New York Attorney General when requested, it will be presumed the terms the freelance worker presents are the agreed upon terms.
The contract must include the following details:
- The name and mailing address of both parties.
- A list of services to be provided by the freelance worker, the value of the services to be provided, and the rate and method of compensation.
- Payment due dates or the method for determining such dates.
- A date by which the freelance worker must provide a list of services actually provided.
The NY Department of Labor has created a model contract to meet the requirements under FIFA.
When are compensation payments due?
Compensation must be paid to the worker on or before the agreed deadline under the terms of the contract. If the contract fails to specify when payments are due, compensation must be paid no later than thirty days after the completion of services.
Once the freelance worker has started performing the contract, the hiring party cannot require the freelance worker to accept less compensation than the contracted amount as a condition of timely payment.
What are the protections against discrimination?
Under the new law hiring parties are prohibited from threatening, intimidating, disciplining, harassing, denying a work opportunity, penalizing, or discriminating against a freelance worker for exercising or attempting to exercise any rights under FIFA. Other protections against discrimination remain protected by other laws such as the civil rights statutes.
What are the consequences for violating FIFA?
The Attorney General will investigate any complaints and may bring an action against accused hiring parties for violations. The Attorney General may bring an action to enjoin unlawful practices which may also result in civil penalties of up to $1,000 for a first violation, $2,000 for a second violation, and $3,000 for any subsequent violations. A penalty of up to $25,000 dollars may also be imposed if it is found that the hiring party has a pattern of violations.
The law also provides freelance workers alleging violations with a private right of action. Workers have two years from the violation to bring a claim for violating the written contract rule and six years for violating the payment rules. Depending on the violations, potential remedies available to freelance workers consist of statutory damages of $250, statutory damages equal to the value of the underlying contract, double damages, injunctive relief, and other appropriate remedies.
How does the NY State FIFA compare to the NYC FIFA? Which law applies in NYC?
The New York State and City laws are not identical. For example, the NYC FIFA does not exclude construction workers from the definition of “freelance worker.” Furthermore, the NYC FIFA lacks a provision requiring freelance workers to provide the hiring party with a date by which they must provide a list of the services rendered.
For New York City entities, they must continue to follow the City law plus the stricter aspect of the state law such as providing a date by the Freelancer must provide a list of services actually provided.
Additional Information
A worker with a written contract does not automatically become an independent contractor. It is important to note that no provision of law addresses who is an employee and who is an independent contractor. That determination is left to other laws such as the Wage and Hour laws.
Moving Forward
An interesting question is if this law, including its private right of action, will spawn a “cottage industry” of freelancers and lawyers who make a living enforcing such laws. The list of laws that have produced such results is extensive. Since the COVID epidemic, freelancing has dramatically grown in popularity. Given the historic number of freelancers, we think private enforcement of this law may become very popular. Time will tell.
It would be prudent for employers in NYC and across the state to review their usage of freelance workers and independent contractors to ensure their contracts and payment plans are compliant.
Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560
