NY Governor Hochul Signs Statewide “Freelance Isn’t Free” Act

Nearly six months after its passage by the New York State legislature, Governor Kathy Hochul signed the “Freelance Isn’t Free” Act into law.  The Act amends the New York Labor Law (adding Section 191-d) and provides new protections and recourse for freelance workers. 

The law, set to take effect May 20, 2024 and applicable to contracts created after that date, supplements a similar New York City law that went into effect in May 2017.  The State version is slightly broader than the City’s and provides for more remedies and statutory damages to aggrieved claimants.

Parties Covered By The Act

The Act governs the relationship between a “hiring party” and a “freelance worker” engaged to provide services valued at or over $800.  A “hiring party” is defined as any person, other than certain governmental entities and subdivisions such as city, state, federal and foreign governments.  A “freelance worker” is any person (or organization composed of one person) hired as an independent contractor to provide services in exchange for $800 or more.  The phrase “independent contractor” is not defined in the law.  

The $800 threshold applies to any contract, either by itself or when aggregated with all contracts for services between the same parties in the preceding 120 days.  The term “freelance worker” excludes any individual: (i) who is engaged by the contract to provide services as a sales representative, as defined in Section 191-a of the Labor Law; (ii) who is engaged by the contract to be engaged in the practice of law; (iii) any licensed medical professional, or (iv) a construction contractor. 

What The Law Requires

Under the Act, when a hiring party retains the services of a freelance worker, the parties must enter into a written contract.  The hiring party is required to provide a copy of the contract to the freelance worker, and the hiring party is thereafter required to maintain a copy of contract for six years.  The contract must include, at a minimum: (i) the name and mailing address of both parties; (ii) an itemization of all services to be provided by the freelance worker, the value of the services, and the rate and method of compensation; (iii) the date on which the hiring party must pay the freelance worker, or describe the mechanism by which such date will be determined; and (iv) the date by which the freelance worker must submit a list of services rendered under the contract in order to meet any internal processing deadlines of the hiring party for the purposes of being paid by the agreed upon date.  Payment is due in accordance with the terms of the contract.  If the information required to be included in (iii) above is not in the contract, then payment is due within 30 days of completion of the services.  The Commissioner of Labor may, by rule, require additional terms in the written agreement, in order to ensure that the parties understand their obligations under the contract.

Once work has begun under the contract, a hiring party is prohibited from reducing the agreed upon rate of compensation.  Further, retaliation is prohibited and no hiring party may take any action which does, or is reasonably likely to, deter a freelance worker from exercising any rights under the Act. 

The statute requires that the contract be given in hard copy or electronic form to the freelance worker, but does not require a contract be given to the freelance worker in his or her primary language (if not English).  However, the law provides that the Commissioner of Labor will make publicly available model contracts in English and in the twelve languages most commonly spoken in New York. 

Remedies

Any freelance worker (or an authorized representative) may file a complaint with the New York Commissioner of Labor regarding any violation of the Act.  The Commissioner is empowered to investigate and adjust equitable controversies and may also sue hiring parties as well as aggregate, in a single action, any number of claims against the same hiring party. 

A freelance worker may also bring a claim in any court of competent jurisdiction, as follows:

Claim	Statute of Limitations	Remedies
Violation of Section 2, which requires payment by the date provided in the written contract or within 30 days of completing work	6 years	Reasonable attorneys’ fees and costs, double damages, injunctive relief and other remedies as may be appropriate.
Violation of Section 3, the written contract requirement	2 years	Statutory damages of $250. If a violation of Section 3 of the Act is the only claim asserted, the plaintiff must prove he/she requested a written contract before the work began.
Violation of Section 4, which includes the Act’s anti-retaliation provisions	6 years	Statutory damages equal to the value of the underlying contract for each violation arising under the Act.

A plaintiff who prevails on a claim under the Act and one or more other provisions of the Labor Law shall receive statutory damages equal to value of the underlying contract for the violation.

Where there is reasonable cause to believe a hiring party has engaged in a pattern or practice of violating the Act, the Attorney General may commence a civil action on behalf of New York State.

Please contact the author or any Seyfarth attorney with questions about the Freelance Isn’t Free Act.