FOR FREELANCERS - EFFECTIVE MAY 20, 2024

BILL NUMBER: S5026
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act to amend the labor law, in relation to enacting the "freelance
isn't free act"
 
PURPOSE OR GENERAL IDEA OF BILL:

To provide recourse to freelance workers experiencing wage theft and
other violations under the Labor Law
 
SUMMARY OF PROVISIONS:

Section one of the bill names it the Freelance Isn't Free Act.

Section two of the bill adds a new section 191-d to the Labor Law.  This
section creates provisions related to the timely payment of freelance
workers, a right to a written contract from a hiring party, an adminis-
trative process for the Department of Labor to investigate complaints,
the ability of DOL to sue hiring parties on wage claims at their
discretion, a private right action for violations of this section with
damages levels, a right to no retaliation, a right of action for the
Attorney General for a pattern or practice of violations, a public
awareness outreach campaign, and a reporting requirement. Much of the
language in this new section 191-d in the Labor Law is drawn from exist-
ing language in Article 6 that provides wage theft protections for
traditional employees, creating parity between the two different types
of laborers.

Section three of the bill provides that the provisions of this act shall
not be construed to override or supplant chapter 10 of title 20 of the
New York City Administrative Code, establishing the NYC Freelance Isn't
Free Law.

Section four of the bill sets the effective date.
 
JUSTIFICATION:

On May 15th, 2017, New York City's Local Law 140 of 2016 establishing
the Freelance Isn't Free Act took effect. This landmark law, which
created basic labor protections for freelance workers such as the right
to a written contract, timely and full payment, and protection from
retaliation, resulted in 1,191 cases filed with the NYC Department of
Consumer and Worker Protection (DCWP) in 2018 and 2019 alone, with more
than $1.3 million recovered in restitution and penalties. In 2020,
amidst the COVID lockdown, there were 490 complaints filed by freelance
workers, 450 for unlawful payment practices. In December of 2021, the
City filed its first lawsuit under the Act against L'Officiel USA, the
American subsidiary of a global magazine company that had demonstrated a
systemic pattern of failing to pay freelancers on time or at all.
These data points clearly demonstrate what freelancers have always known
to be true: that independent contractors, not protected by the same
minimum wage laws as regular employees and generally ineligible for
unemployment and workers compensation, are some of the most exposed
laborers in our state when it comes to wage theft. Article 6 of the
Labor Law, which prohibits wage theft without exception for employees
directly hired by an employer, does not cover freelancers such as writ-
ers, editors, graphic designers, videographers, consultants, temps, and
those who are otherwise self-employed. While New York City's Freelance
Isn't Free Law was a major point of progress for this vulnerable subset
of the labor force, NYC DCWP simply does not have the resources to prop-
erly handle the thousands of cases that come across their radar every
year. Furthermore, DCWP has no power to actually compel a hiring party
to pay, forcing freelance workers 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 replicate the labor rights of NYC's Freelance Isn't Free
Law in state Labor Law, adding administrative oversight and support from
DOL while maintaining the city's local law. It would mandate that any
hiring party across the state retaining a freelancer's services for at
least $800 provide such freelancer 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, and a cause of
action when any of the above obligations are not met. Additionally, NYS
DOL must provide model contracts as well as a non-judicial, administra-
tive 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.

In establishing basic protections against some of the most pernicious
workplace practices, the Freelance Isn't Free Act supports a key popu-
lation in the modern workforce that is currently unprotected by state
Labor Law. It is the sponsor's belief that adding enforcement for Free-
lance Isn't Free at the state level, which already has a Division of
Labor Standards that handles wage theft claims for traditional employ-
ees, makes good administrative sense and will reduce the need for
aggrieved freelancers to file a claim in civil court. All laborers in
our state deserve the right to fair and timely pay, regardless of the
nature of the work, and bills such as the Freelance Isn't Free Act will
play a key role in holding hiring parties accountable to ensure this
reality.
 
PRIOR LEGISLATIVE HISTORY:
2022: S8369B - Vetoed, Veto Memo no. 170
 
FISCAL IMPLICATIONS:
TBD
 
EFFECTIVE DATE:
This bill shall take effect on the one hundred eightieth day after it
shall have become a law.