NYC Passes Bill to Protect Freelancers’ Wages

cameraThe New York City Council voted to pass the Freelance Isn’t Free Act last Thursday, giving freelance workers a set of legal protections against wage theft.

Believed to be the first law of its kind in the U.S., the Freelance Isn’t Free Act requires anyone hiring a freelancer to agree in writing to a payment procedure and timetable.

This much-needed bill comes at a time when the workforce is changing drastically. According to economists Lawrence Katz and Alan Krueger, contract workers, temporary workers, and freelancers made up 16% of the workforce in late 2015, up from 10% in 2005. To adjust to this shift, lawmakers need to lay down new rules and policies so that nontraditional employees’ rights are protected.

“New York is in some ways at the center of the gig economy, of the evolution of the economy to more independent and contingent work,” said Brad Lander, the councilman who introduced the bill.

According to Lander, the existing labor laws are “so badly outdated they don’t give the basic protections all workers expect, much less broader support and benefits to all workers in the growing gig economy.”

Freelancers Union executive director Sara Horowitz noted that one of the most important provisions outlined in the bill is the requirement of a written contract for any freelance job that pays $800 or more over a four-month period.

“One of the things that trips people up is they go to sue in Small Claims Court and try to get a judgement and they don’t have a contract,” said Horowitz. “You’re left with, ‘We had a conversation. I wrote down these notes.’”

The Freelance Isn’t Free Act also stipulates that freelance workers who do not receive full payment by the specified date will receive double damages if they win the lawsuit. Additionally, the court would require the company or employer to pay the freelancer’s legal fees and would award a higher amount if no contract had been signed upon hiring.

Right now, the estimated annual cost of civil lawsuits to each American citizen is about $809. Lawmakers and freelancers hope that this new bill will discourage individuals and companies from taking advantage of workers and that there will be fewer legal battles in the future.

“It starts us looking at a new form of enforcement — now it’s worth a lawyer’s time to start taking cases, you’re building up a marketplace,” said Horowitz. “Once you start to see the market function, companies start to know they can’t do this.”

According to the Freelancers Union, there are nearly 4 million freelance workers in the New York metropolitan area. Freelancers work in a number of different fields, including writing, customer service, accounting, and IT. One of the most common and fast-growing freelance jobs is web design since nearly half of Internet users say that a website’s look and layout are their top ways to determine the credibility of a company. Unfortunately, many of these workers are not being compensated in a timely manner, making it difficult to get by, especially in a place like New York City.

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