“Freelance Isn’t Free Act” (FIFA) – New York City Employers
Effective May 15, 2017, the New York City “Freelance Isn’t Free Act” (FIFA) will place additional requirements on companies who do business with “freelancers”, otherwise known as independent contractors. The new law provides additional protections for freelance workers and imposes penalties to employers who do not follow the regulations.
Who is Affected
A freelance worker is any person or organization of no more than one person that is hired as an independent contractor by any hiring party (company or organization). All New York City employers are covered by FIFA unless part of the US government, New York State government, agency or authority, New York City government, or any other local or foreign government.
New Requirements for Companies
Starting May 15, hiring parties with any new contracts established with a freelancer providing services or products costing $800 or more must be made in writing. All contracts between the hiring party and freelancer in the last 120 days aggregated to $800 or more will also fall under the new law. Copies of all written and signed contracts must be kept by each party.
All written contracts must include:
- Name and address of both parties
- Itemization of all services to be provided by freelance worker
- Value of services to be provided
- Rate and method of compensation
- Date freelance worker must be paid or how date is determined
Other terms to be included in the contract may be determined and required in the future and will be communicated accordingly by the Office of Labor Standards (OLS). A website will be established and provide model contracts for use by the general public at no cost.
In addition to the written contract requirement, FIFA also states that compensation due to the freelancer must be paid either on or before the due date specified in the contract. If not specified, payment must be made no later than thirty (30) days after the completion of the freelance worker’s services that fall under the contract.
Once work has begun under the contract, the hiring party cannot require a freelance worker to accept less compensation than the contracted amount.
Retaliation and Complaint Procedure
FIFA protects freelance workers, who exercise or attempt to exercise any rights guaranteed under the new law, from any retaliation by a hiring party.
The OLS has also established a procedure for complaints made by freelance workers against hiring parties in violation of FIFA. In addition, FIFA allows for civil action to be brought upon a company that violates any portion of the new law. After a complaint or suit has been filed, the OLS Director will send a voluntary survey to all claimants. Responses will be compiled and published in a report every five (5) years. The full complaint process, fines and penalties, and a summary of the survey results will be made available on the OLS website.
A navigation program will be established to provide information and assistance to freelance workers and hiring parties on the OLS website. Included in the program will be model contracts available at no cost, information on classifying individuals as employees or independent contractors, relevant court forms and templates, and other educational resources.
What Do I Do Now?
It is recommended to review all independent contractor relationships to ensure each is classified appropriately. If you are looking to enter into contracts with an independent contractor, review your practices and any written contracts in order to comply with the new NYC FIFA requirements.
Additional information on FIFA may be found here. Please contact your HR Specialist at Alcott HR if you have any questions about FIFA.