New York State Senator Andrew Gounardes introduced Senate Bill #5026, which is named the “Freelance Isn’t Free Act.” If enacted, the bill would amend the New York Labor Law to provide recourse to freelance workers experiencing wage theft and other labor law violations. A freelancer is another term for an independent contractor. Since most for-hire vehicle (FHV) drivers are independent contractors, I’m writing this column to provide an update on what the proposed law is and how it affects New York’s FHV industry.
Currently, Article 6 of the New York Labor Law provides certain wage theft protections for traditional employees but not for independent contractors. This is an anomaly that the New York legislature does not want to be left to stand. This bill would create parity between the two different types of laborers. If passed, the bill would provide independent contractors across the entire state (not just NYC) with the same wage theft protections as traditional employees.
By way of history, on May 15, 2017, New York City’s Local Law 140 of 2016, establishing the Freelance Isn’t Free Act took effect. This law created basic labor protections for freelance workers, such as the right to a written contract, timely and full payment, and protection from retaliation. Timely payment is payment by the hiring entity to its freelancer(s) within 30 days of the work being completed. Since independent contractors are not protected by the same minimum wage laws as regular employees and are generally ineligible for unemployment compensation, they are some of the most exposed laborers in the state when it comes to wage theft.
While New York City’s Freelance Isn’t Free Law was a major point of progress for this vulnerable subset of the labor force, the NYC Department of Consumer and Worker Protection (DCWP) simply does not have the resources to properly handle the thousands of cases that cross their radar every year. Furthermore, DCWP has no power to actually compel a hiring party to pay, forcing freelance workers/ independent contractors to resort to small claims court to enforce their rights. Lastly, the city law covers only persons doing business with an entity located in New York City, excluding freelancers in the rest of the state.
This bill will add administrative oversight and support from the New York State Department of Labor while maintaining the provisions of the city’s local law. It would mandate that any hiring party in New York State who retains a freelancer’s services for at least $800 provide such freelancers with a detailed written contract and timely and full payment. The bill also includes an anti-retaliation provision for the exercise of rights prescribed therein.
The bill seeks to have the New York State Department of Labor provide model contracts as well as a non-judicial, administrative process for resolving disputes between freelancers and hiring parties. This bill replicates labor protections that already exist for traditional employees covered under Article 6 in the Labor Law, creating parity between employees hired onto a payroll and freelancers hired under a time-limited contract.
The sponsor of the bill believes that adding enforcement for Freelance Isn’t Free at the state level, which already has a Division of Labor Standards that handles wage theft claims for traditional employees, makes good administrative sense and will reduce the need for aggrieved freelancers to file a claim in civil court.
Overall, the bill makes good sense. There is no reason that freelancers outside of New York City should be taken advantage of. Likewise, no reason exists for an entity outside of NYC not to have a contract with its freelancers. All parties should be entitled to a written contract. It leaves less room for ambiguity and interpretation. The hiring entity and the freelancer should know their rights and obligations. Also, an enforcement mechanism by which a freelancer can make a complaint and have the assistance of the Division of Labor Standards will encourage all entities to make timely payments for services rendered. In this day in age, with the rise and proliferation of the gig economy, freelancers deserve some protections against entities that unreasonably withhold or delay payment for work.
As of now, all New York City FHV bases should be compliant with the New York City Freelance Isn’t Free Act. If it becomes a law, this bill will extend the same protections to freelancers throughout the state. If you don’t know this law and whether or how it applies to you, you should look into it further. If you need help drafting a contract or to determine your rights and responsibilities as a hiring entity or freelancer, reach out for help. As always, I remain committed to helping FHV bases and FHV drivers so all can survive and thrive.
