New Law in New York City Protects Independent Contractors

On May 15, 2017, a new law will go into effect in New York City to protect “freelance workers,” which is broadly defined to include all independent contractors other than sales representatives (who already are protected by another NYC law), lawyers and doctors.

The Freelance Workers Protection Law will apply only to new contracts entered into after May 15, 2017.  It applies if the hiring party is either an individual or a business, but does not apply to contracts with the state, federal, or local government.

Some of the law’s key provisions and requirements are described below.

Written Contracts

Under the new law, a party hiring a freelance worker for more than $800 in total services must enter into a written agreement.  The contact must include:

  • The name and address of both parties;NYC Law Protects Independent Contractors
  • A list of all services the freelance worker will provide;
  • The value of those services;
  • The rate and method by which the worker will be compensated; and
  • Either the date when the worker will be paid, or a description of how the parties will determine when the worker will be paid.

In addition, a freelance worker cannot agree to waive his rights under this new law.

Timing of Payments

If the contract indicates when the freelance worker will be paid, then the hiring party must pay him in accordance with the contract.  But if the contract does not state when the worker will be paid, then the hiring party must pay the worker within 30 days after worker’s services have been completed.

After the worker has begun to perform his services under the contract, the hiring party cannot require him to accept anything less than the full amount due as a condition to being paid on time.

Anti-Retaliation Provision

The law prohibits a party who hires a freelance worker from harassing, threatening, disciplining intimidating or otherwise penalizing the worker because he attempted to exercise his rights under the law.

Available Damages

A freelance worker who wins a claim under the law is entitled to recover his attorneys’ fees and costs.

A worker who establishes the hiring party violated the requirements to have a written contract that covers all of the required topics is entitled to $250 in damages.

A worker who proves a violation of the law’s requirements regarding the timing of payments is entitled to double damages.

A worker who establishes a violation of the law’s anti-retaliation provision is entitled to damages equal to the full value of the contract for each violation.

In addition to any other applicable damages, a worker who proves a violation of both the requirements to have a written contract and a violation of another provision of the law is entitled to additional damages equaling the value of the contract.

Statute of Limitations

Claims for violations of the new law can be filed either with the Director of NYC’s Office of Labor Standards or in court.  Claims brought with the office of Office of Labor Standards must be filed within 2 years of the violation.  Claims filed in court regarding a failure to have a written contract also must be brought within 2 years.  However, claims that a hiring party failed to pay a worker on time and claims for retaliation can be filed at any time within 6 years after the violation.