Freelance Isn’t Free Act offers challenges and opportunities

The Freelance Isn’t Free Act (FIFA) was a local law in New York City enacted on May 15, 2017. It established labor rights protections for freelance workers, requiring written contracts for services costing over $250, timely and full payment and protection from retaliation. The penalties for violations included statutory damages, double damages, injunctive relief, and attorney’s fees. While the state may adjudicate individual causes of action,  Corporation Counsel may bring civil action to recover a civil penalty of not more than $25,000 when evidence of a pattern or practice of violations exists.

In 2023, this law was extended to freelancers across New York State, adding oversight and enforcement from the New York State Attorney General’s Office. While the Attorney General can bring actions to obtain remedies, including damages and civil penalties, on behalf of impacted freelance workers, individual freelance workers also have the right to pursue a private lawsuit to protect their rights under the new law.

The pros and cons of Freelance Isn’t Free Act

FIFA has created challenges and opportunities for freelancers and those who hire them. While the law looks good on paper, freelances still face adversity:

1. Late payments and non-payment: Despite the law, freelancers still endure late payments, underpayments or complete non-payment.
2. Scope creep: This occurs when the client increases the project scope beyond the agreed terms without providing additional compensation.
3. Retaliation: The act includes strong provisions against retaliation, but some actions may be seen as penalizing freelancers for exercising these new rights, including harassment or denial of future work.
4. Worker classification: FIFA does not address the proper classifications as an independent contractor or an employee.

Still, many also see the positive impact of a law with some teeth:

1. Payment protection: The act enforces timely compensation, ensuring freelancers get paid within 30 days of completing their services or another date agreed upon in writing⁴.
2. Double damages for violations: In instances of payment breaches, freelancers receive double the agreed contract value, which is a significant deterrent against client non-compliance⁴.
3. Written contracts: For any freelance work exceeding $800, a written contract must now legally provide a clear outline of the work expectations and payment terms⁴.
4. Statewide expansion: FIFA was extended to freelancers across the state in 2023, adding oversight and enforcement from the New York State Attorney General’s Office⁴.
5. Improved professional relationships: By ensuring that contracts are in place, payments are prompt, and freelancers are protected against retaliation, employers and freelancers can engage in more productive and secure professional relationships⁵.

Legal help may still be necessary

These changes have significantly impacted the freelance landscape, providing more security and fairness for freelancers while also holding those who hire them accountable. However, a lawyer for freelance workers may need to take action if the employer doesn’t follow these new laws. As stated above, the courts include legal fees in the damages.