Crain's: Millions of New York freelancers win protections this month under Sen. Gounardes' law

Some 2 million freelance workers across New York state will come under new protections starting this month when the Freelance Isn’t Free Act passed last year goes into effect.

The law, which takes effect Aug. 28, aims to address workers’ longstanding complaints of missing and late payments. It requires employers to provide contracts for all freelance work worth more than $800 over a four-month period and make payments by the due date listed in the contract — or within 30 days of work being completed when no date is listed. It builds off a similar set of policies that New York City enacted in 2017.

Employment law firms have begun warning their clients about the “extensive” scope of the law, which will be enforced by the state attorney general. But Andrew Gounardes, the Brooklyn state senator who sponsored Freelance Isn’t Free, said the provisions are straightforward.

“Number one, the person you’re hiring is entitled to a contract. Number two, you have to pay them on time,” he said in an interview. “If you do those two things, you won’t have any problem whatsoever complying with this law.”

The law contains a few other provisions. Employers will be barred from offering less money than promised in exchange for a quicker payment — a bait-and-switch that freelancers say is all too common. And the contracts given to freelancers must include information like an itemized list of services being provided, the value of those services and the method of payment.

Little will change for New York City-based employers, who already had to comply with the city law of the same name. But Gounardes said city-based freelancers will now have more options if they feel their rights are being violated, with the ability to now file complaints with the state attorney general in addition to the city’s Department of Consumer and Worker Protection.

The state law also allows freelancers to file a civil lawsuit for non-payment or if their employer retaliates against them for exercising their rights. Workers who prove non-payment will be entitled to damages worth twice their promised fee, or $250 in damages if they prove they were never given a contract. The attorney general can also fine employers up to $25,000 if they have a “pattern or practice” of stiffing freelancers.

The law carves out construction workers, medical professionals and attorneys, none of whom are covered by the new protections.

Gov. Kathy Hochul had vetoed a previous version of Freelance Isn’t Free in 2022, saying it would put too much strain on the state’s Department of Labor. But she approved the bill last year after its authors shifted the enforcement burden to the attorney general’s office, making New York the second state after Illinois to enact such protections for freelancers.

The law was initially slated to take effect in May, but Hochul and the Legislature agreed to push the date back to August as part of a so-called “chapter amendment” added early this year after the bill had passed.

The AFL-CIO and International Brotherhood of Teamsters labor unions both lobbied lawmakers on the bill while it was being discussed last year, as did the National Federation of Independent Business. State records do not specify any of those groups’ positions on the bill.

Supporters of the law have pointed to a 2022 survey of 400 freelancers nationwide, which found that nearly three-quarters said they do not get paid on time. Nearly 60% said they were owed more than $50,000 for completed work, according to the survey, which was done by the worker’s advocacy group the Independent Economy Council.

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