Freelance Workers and Their Employers Need to Know the Following about New York's Freelance Isn't Free Act
On November 22, 2023, Governor Kathy Hochul signed New York's Freelance Isn't Free Act (the Act or FIFA), set to take effect on August 28, 2024. FIFA expands on the protections in the 2016 New York City law of the same name, providing enhanced protections for freelance workers across the state.
The Act mandates that all New York businesses formalize their agreements with independent contractors in a written contract if the total compensation for services amounts to $800 or more within 120 days. The Act also outlines clear payment requirements, mandating that freelancers can be compensated on or before the due date specified in the contract, but no later than 30 days after the completion of the freelancer's services.
Employers throughout New York State must be vigilant about the potential litigation risks associated with the Act. As an example, the new provisions impose significant financial liabilities on organizations for missed payment deadlines. Under the Act, freelancers can seek double damages and attorneys' fees if payment is not made in a timely manner. The Act further allows freelancers to pursue injunctive relief for non-payment claims. Employers are required to retain and provide a copy of the written freelance contract for up to six years. In the event of a dispute, if an employer cannot produce the contract, there is a presumption that the terms presented by the freelancer are the agreed-upon terms.
Compliance
Specify Correct Worker Classification
Update Documentation
Use Model Contracts as well as having legal counsel review
Provide Training
This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client relationship.
For more information on this and other topics, please contact Kevin via any of the channels listed below:
📧 kevin@kmckernan.com | 📞 718-317-5007