Freelance Isn’t Free Act

February 8, 2024 Posted by MBW

The “Freelance Isn’t Free Act” was signed into law by New York State Governor Kathy Hochul on November 22, 2023. The law will become effective beginning on May 20, 2024.

With the intent of protecting freelance workers, who are “natural person[s] or organization[s] 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,” the law: (1) requires timely payments; (2) provides a right to a written contract for the services offered; (3) sets forth specific provisions that must be included in written contracts; (4) establishes new legal claims and penalties for non-payment; and (5) requires payment to be made either on or before the date the compensation is due under the contract or within 30 days after the completion of the services under the contract. NY Labor Law Section 191-d. For employers, the “Freelance Isn’t Free Act” also requires that they retain a copy of the contract for 6 years. As a result of these items, employers that utilize the services of independent contractors are now faced with situations in which those individuals are afforded “employee-like protections.”

This is true, even if the individual is correctly classified as an independent contract. Certain limitations on who is covered by the “Freelance Isn’t Free Act” include, sales representatives, practicing attorneys, licensed medical professionals and construction contractors. Contact the attorneys at Mackey Butts & Whalen, LLP today to see if you and your independent contractors are in compliance with the new law.

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