As of now, all New York City FHV bases should be compliant with the New York City Freelance Isn’t Free Act. If you don’t know this law, and whether or how it applies to you, you should look into it further. A freelancer is another term for an independent contractor. Since most For-Hire Vehicle (FHV) drivers in NYC are independent contractors, I’m writing this to provide an update, not just on how this law came about, but what has happened since it was implemented.

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. 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.

The city law requires a written contract between an FHV base and an FHV driver. The contract must contain certain terms and must be reduced to writing. The law also requires timely payment of monies and prohibits a company from retaliating against a freelance worker for exercising or attempting to exercise any right guaranteed under this law.

On November 22, 2023, Governor Kathy Hochul signed into law the New York State version of the “Freelance Isn’t Free” Act, which provides freelance workers outside of NYC the very same protections across the state. While the City law is in effect, the state law takes effect on May 20, 2024.

Since the time in which the NYC version of the Freelance Isn’t Free Act went into effect, the New York City Taxi & Limousine Commission (TLC) promulgated new rules that seem to mimic the Freelance Isn’t Free Act. For example, TLC Rule 59B-18(f) requires Base Agreements with FHV drivers who accept a dispatch from a base. These agreements must be in writing and contain all costs/fees that the base charges and how driver earnings are calculated. The rule also states that payment to the driver is required within 30 days, and a written receipt must be given to the driver or vehicle owner for every financial transaction. The base is also required to maintain records of the agreements and receipts for three years. The penalties for violations of the rule vary. The most severe one says that if a base is found to have overcharged a driver and not have a written agreement with the driver on two occasions, then the base can have its license suspended for up to 30 days.

While a driver may not complain to the appropriate city government agency about the lack of a written agreement, the TLC is surely known for sending out directives. We know that TLC rule 59B-13(j)(1) mandates that all bases comply with all communications, directives, and summonses from the TLC. Directives from the TLC are always serious business because the failure to reply to a directive in a timely manner will result in the suspension of your base license until there is compliance.

It would not be unheard of for the TLC to start sending out directives to bases just to see who is and who is not in compliance. Compliance with TLC directives takes time out of the busy day of a base owner/operator. Think of how much time it will take out of your day if the TLC directs a base owner to comply with a directive by sending a copy of your base agreement with one random driver to whom the base sent a dispatch. Then, think of how much aggravation the base owner will have to endure if it does not have base agreements or an agreement with a specific driver. Of course, if a base has its license suspended for one day, then it cannot send out any dispatches for that day, or else the base risks further regulatory action for dispatching without a license.

The moral of the story is: If you don’t have the proper base agreements with drivers to whom your base sends dispatches then you should take immediate action to get into compliance. This is one of those things that can easily be done and will avert serious problems. But that requires base owners to take the appropriate steps to get those agreements drafted and get them signed by all drivers you send dispatches to. Also, you need a means of maintaining and storing these agreements. It does not help your case to say I had the agreement, but now I don’t know where it is.

If you need help drafting a contract or determining your rights and responsibilities as a base owner/operator, reach out for help. As always, I remain committed to helping FHV bases and FHV drivers so all can survive and thrive.

Article by Steven J. Shanker, Esq.

Steven J. Shanker, Esq. is General Counsel to the Livery Roundtable, Inc. and the New York Independent Livery Driver Benefit Fund.

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