NYC Council Bill Protects Freelance Employees from Wage Theft

New York City Council Passes Bill Protecting Freelance Employees from Wage Theft

Traditionally, unpaid wage lawyers, like the ones at Leeds Brown, represent employees when their employers refuse to pay minimum wage, overtime, and/or tips. When an employer refuses to pay an employee money as required by laws such as the Fair Labor Standards Act, the worker has legal recourse. An employee may file an unpaid wage or unpaid overtime claim against his or her employer and recover money to which they are entitled. Sometimes, they may recover even more. Laws also protect employees from discrimination and retaliation.

Independent contractors, however, do not receive protection from many of the laws that help employees. Independent or freelance workers are often self-employed and negotiate the terms of their jobs with each person or company with whom they do business. They are not legally entitled to receive wages, or overtime other than what is outlined in a contract or other agreement they enter into for a particular job. Freelance workers do not get the level of protection from discrimination or retaliation in the way that employees do.

Employers often refuse to pay freelance workers money they have earned. According to a report from the Freelancers Union, over 70% of freelance workers report problems collecting payment at some time during their career. In New York City, independent workers are one step closer to receiving added legal protection from such wage theft.

First Bill of its Kind Provides Protection for Freelance Workers

On October 27, 2016, in a unanimous decision, the New York City Council passed a bill intended to provide wage protection for freelance workers. New York City Mayor Bill DeBlasio signed the Freelance Isn’t Free Act into law on November 16, 2016. Sara Horowitz, founder and executive director of the freelancers union, informed Bloomberg BNA that this is “the first time that there has been any kind of labor or employment law that is protecting independent contractors.”

What Will the “Freelance Isn’t Free” Act Do?

Gothamist reports that New York City Council member and lead sponsor of the bill, Brad Lander, said that the act would ensure that workers are paid “on-time and in full.” Under the provisions of the law, employers will have a 30-day window after a freelance worker renders services to remit payment in full. For all jobs for which the freelancer will earn more than $800, the “hiring party” and freelancer will need to enter into a written contract specifying the date of payment. If there is no agreed upon date, it will automatically be 30 days after completion of services. According to the Bloomberg BNA report, the Act will also protect freelance workers who live in New York City in the following ways:

  • Freelancers who bring successful litigation against employers in breach of the law will be able to receive double damages and attorneys’ fees.
  • Employers will not be permitted to retaliate against freelancers who seek to enforce their labor rights.
  • The Department of Consumer Affairs will have a formal channel to be able to implement the labor rights of freelancers who are stiffed by employers.
  • Freelancers would file complaints with the city’s Office of Labor Standards, which would tell companies of the claims and seek a response.
  • Civil penalties for repeat offenders

New York City Leads the Nation by Protecting Freelance Workers

Consider the following scenario: A freelance worker performs a job and bills for $2000. Currently, if the hiring party does not pay the worker may go to small claims court. If a written contract exists, the court may award the worker the money owed. If there is no contract, the worker may lose altogether.

Under the Freelance Isn’t Free Act, the same situation has the potential for a significantly better outcome. The freelancer would presumably have a written contract. If thirty days passes and the employer does not pay, the worker who prevails will receive $4,000 plus attorney’s fees for the employer’s refusal to pay promptly. If there is an incomplete contract or no contract at all, the court may award additional monetary compensation.

The law will go into effect 180 days after it was signed, May 15, 2017. When it does, freelance workers like Alli Rice, a video editor living in Manhattan, will be grateful for the extra protection. She told the NYT that it often takes clients 6-10 weeks to pay for her services, at times making it difficult for her to pay rent and other expenses. She hopes that the bill gives companies incentive to make timely payments to freelance workers. If it does not, at least, she will have the legal backing to support a claim against the ones that refuse to pay.

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Employment law attorneys at Leeds Brown represent workers in New York City and nationwide in pursuit of unpaid overtime, tip theft, unpaid wages and all related wage and hour claims. We take pride in working hard to hold employers accountable when they refuse to pay your hard earned money.

You can reach our office for a free case evaluation by calling 1-800-585-4658. Someone is available to take your call 24/7.


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