New York City Mayor Bill DeBlasio recently signed into law the Freelance Isn’t Free Act (FIFA) in an attempt to protect independent contractors. The provisions of this law go into effect on May 15, 2017. FIFA has set a number of standards that anyone other than a governmental agency must comply with when hiring a “freelance worker”. FIFA defines a freelance worker to be any natural person or any organization (such as a corporation or limited liability company) 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 by a hiring party to provide services in exchange for compensation. The act specifically excludes sales representatives, attorneys and medical professionals from the definition of freelance employees.
FIFA requires a written contract when the hiring party hires the freelance worker for $800 or more of work within a 120 day period. The contract must include the name and mailing address of both parties, an itemization of all services to be performed, the rate and method of compensation and the date on which the hiring party must pay the contracted amount. If the contract doesn’t specify a date of payment, payment must be made within 30 days after the completion of the work. Additionally, FIFA provides for a number of damages for violations of the various sections of the act.
While FIFA should help to protect the rights of independent contractors, it also creates additional complexities when hiring independent contractors. New York City businesses and residents will need to ensure that they comply with the requirements of FIFA to avoid any damages provided for in the act.