Bill Protecting NYC Freelancers from Deadbeat Companies Moves Forward With Majority Support

At City Council Consumer Affairs Hearing, Writers, Domestic Workers, Web Developers, & More Advocate for “Freelance Isn’t Free” Act, First-of-its-Kind Legislation to end Non Payment Epidemic

1.3 Million Freelancers in NYC; Stiffed an Average $5,968/year

NEW YORK – Graphic artists, writers, domestic workers, and other representatives of NYC’s 1.3 million freelancers testified before the City Council’s Committee on Consumer Affairs today and rallied outside City Hall to demand passage of the “Freelance Isn’t Free” Act.

The proposed legislation, the first-of-its-kind in the country, provides basic protections for independent workers from deadbeat companies who refuse to pay, or force freelancers to wait months for their checks.

First introduced by Council Member Brad Lander and a broad coalition of business and labor organizations led by the Freelancers Union, the bill has gained support from a majority of the Council, with 27 of 51 members currently signed on.

Freelancers from across New York City gathered outside City Hall and testified in support of the bill:

“You can’t just decide not to pay your electric bill, landlord, or the guy at the deli. Hiring a contractor is no different - it’s not a favor, or an option,” said Chris Maue, freelance video editor. “If you don’t have the money to hire a freelancer, you can’t just let them know that after they do the work. If your business model depends on exploiting other people, it’s a bad model."

More than 70% of freelancers experience late or nonpayment at some point in their career, getting stiffed an average of $5,968 every year – forcing many to use credit cards or rely on government assistance to make up the difference.

For traditional workers, who receive a W2 as their tax document, rather than a 1099, the State Department of Labor provides protections against wage theft, investigating complaints and enforcing damages. For new economy workers, however, there are only two options: sue or walk away. And increasingly that’s a gamble companies with lawyers and resources at their disposal are willing to make.

“Whether it’s an Uber driver, a healthcare worker, or a freelance web developer, more and more New Yorkers are choosing the freedom and flexibility of the gig economy over the traditional 9-to-5 rat race. These workers make up the backbone of NYC’s economy, but unfortunately, there is no system in place to protect them when they don’t get paid,” said Freelancers Union Founder and Executive Director Sara Horowitz. “It’s time to hold these deadbeat companies accountable. That’s why we’re urging the NYC Council to pass this groundbreaking legislation and give these independent workers the protections they deserve.”  

“Everyone who works deserves to get paid, on-time and in-full. Unfortunately, 70% of freelancers in NYC have been cheated out of payments they were owed. I’m proud to work with Freelancers Union and many of my colleagues to advance first-of-its-kind legislation to provide independent workers with real protections against payment theft,” said Council Member Brad Lander, Deputy Leader for Policy and prime sponsor of Intro 1017, the Freelance Isn’t Free Act. “Thank you to the writers, web-designers, domestic workers, and many more who shared their stories today. Together, we can write new rules for the new economy that insure fair treatment for all workers.”

Under the proposed bill, any company that hires a freelance worker would have to execute a simple written contract, describing the work to be completed, the rate and method of payment, and date when payment is due. Those companies that stiff freelancers would face consequences including double damages, attorney’s fees, and civil penalties from judges and the NYC Department of Consumer Affairs.  

The Freelance Isn’t Free Act has broad support in the NYC Council, with 27 members already co-sponsoring the bill. Freelancers Union also has built a diverse coalition of support for the legislation that includes business, tech and labor organizations like the 1.6 million-member American Federation of Teachers (AFT), which counts adjunct professors among its ranks.

“Too many companies are taking advantage of this broken system, and it is costly to both freelancers and the city,” said Randi Weingarten, president of the AFT. “The AFT is committed to ensuring that independent workers in New York City and across the country are able to get paid for the work that they do. We are hopeful that the NYC Council will set an example for the rest of the country to follow by standing up for working families and passing this groundbreaking piece of legislation.”

“The Freelancers' bill is fundamentally about fairness and protection. New York City's 1.3 million freelancers face many challenges but one of the most common is the problem of late or nonpayment. Like many New Yorkers, freelancers have obligations such as rent, utilities and business expenses that they have to pay.  We can no longer sit by idly and allow hard-working people to be taken advantage of because they are not a traditional employee. It's time that we protect independent workers from these bad business practices,” said Council Member Rafael L. Espinal, Jr., the Chair of the Council’s Consumer Affairs Committee.

"Too many workers are being cheated out of their fair wages and have no recourse against their employer, which why I am proud to co-sponsor this important legislation. In our changing economy, we must ensure that freelance workers have the same protections as the traditional labor force. With this legislation, New York can stand true to its legacy as a city that respects and stands up for all of its workers and we can send a clear message that we will never accept wage theft in our city," said Letitia James, Public Advocate for the City of New York.

“If NYC wants to continue being the epicenter of innovation and entrepreneurship in this country, we’ll need to be able to draw and retain top talent. But that will be difficult if these creative individuals worry that they won’t get paid for the work they do,” said New York Tech Meetup’s Board Chair Andrew Rasiej. “We need to pass this bill and provide the City’s independent workers the basic protections they need to ensure they get paid – on time and in full.”

“Credit card companies don’t accept late payments. Neither do cashiers at the grocery store. So why should freelancers wait months, or even years, to get paid?” said Council Member Margaret Chin. “That is why I am joining Council Member Lander and others to push legislation to establish the simple principle that all New Yorkers should be paid in a timely manner for their work.  For the first time, this legislation would make deadbeat companies accountable to our City for refusing to pay or delaying payment to their workers. I urge my Council colleagues to join us in this effort to protect workers struggling to take care of themselves and their families.”

“Freelancers make invaluable contributions to a variety of sectors and their hard work and dedication are an important element of our city’s economic strength.  New York’s freelancers and other independent workers need to know that the City will have their backs if they are the victims of wage theft.  I am proud to support this legislation to give freelancers the protections they need and deserve,” said Council Member Stephen Levin.

“We are currently witnessing a radical transformation of the nature of work and how we organize economic activity. As the gig economy continues to grow, the laws we have in place must expand rapidly to accommodate the needs of the modern workforce. This legislation is an important step in addressing a critical and fundamental gap in the protections that freelancers have today,” said Arun Sundararajan, Professor at New York University's Stern School of Business.”

 “With 1.3 million freelancers in New York City and an average of nearly $6,000 lost due to nonpayment, we need to protect the rights of this significant, undervalued portion of our workforce. The passage of the “Freelance Isn’t Free” Act would require written contracts that would eliminate ambiguity by detailing the responsibilities of both parties to ensure accountability. It’s about time that all freelancers were treated fairly with equal protection against wage theft,” said Council Member Laurie A. Cumbo.

“These companies know they can take advantage of our workers, especially low-wage laborers that are most at risk. This historic bill levels the playing field by updating our currently outdated laws. Now is the time to come together so we can hold these companies accountable and ensure low-wage New Yorkers get paid for the work they do, and I urge the City Council to act without delay and pass this legislation,” said Deborah Axt, Co-Executive Director of Make the Road New York.

“Every worker who successfully executes their job should be paid on-time and in full, regardless of their status as a freelancer. This innovative legislation would finally provide necessary protections to the City’s 1.3 million members of the independent workforce, and make NYC the nation’s leader in protecting freelancers. After the hearing, it should move quickly through the legislative process and on to the floor for a full Council vote," said Council Member Ritchie Torres of the Bronx.

“Transparency is the hallmark of a responsible business. With this legislation we can create a level playing field, where there is clarity for all parties, greater trust is created, and we can then focus on creativity, innovation, quality work and economic benefit for freelancers as well as businesses,” said David Levine, CEO of American Sustainable Business Council, which represents over 250,000 businesses.

“Freelance workers are too often denied compensation and are taken advantage of after they perform a job. This violates a fundamental tenet of commerce and undermines the productivity of every-day workers who drive economic growth. New York City should be a leader in reforming this status quo, and it’s why I’m proud to stand with Council Member Lander and leaders in the labor movement, so we can finally end this injustice once and for all,” said Council Member Mark Levine.

"The meteoric rise of the freelance economy has caused one of the biggest workforce revolutions in decades.  Top companies like Walgreens, AT&T, and Yahoo use Work Market because they rely on freelance talent. It's time to update our antiquated labor laws and support the new workforce," said Jeff Wald, Founder of Work Market.

"This bill is a direct response to a changing economy where we are seeing more New Yorkers, including a large number of immigrants, turning to freelance labor. It requires that employers remember that freelance work is dignified work that should be treated with respect. This Council will not sit back and watch the hard labor of New Yorkers be exploited,” said Council Member Carlos Menchaca.

“In the U.S., we have rules to protect those who work for others, but unfortunately few for those who work for themselves. Independent workers currently have none of the protections afforded to traditional workers, and no city agency to turn to for help. By requiring that any company hiring a freelancer execute a simple contract that includes the payment rate, method, and due date, we can be ensured self-employed people can focus on growing their businesses and the economy, not chasing down payments,” said Mike McDerment, CEO of Freshbooks.

“The proliferation of the ‘gig economy’ in New York City and across the country raises serious concerns about job security and worker protections that must be accounted for,” said Council Member Ydanis Rodriguez. “Too many workers are left to the whims of a tumultuous market, often compounded by less than scrupulous employers, an untenable  situation for many working families. Intro 1017 will take a much needed step in the right direction and I am proud to support Council Member Lander’s initiative.”

"Freelance workers face exploitation every time they don't get paid for the work they do. As the "gig economy" encourages a race to the very bottom for wages, we need to make sure real safeguards are in place. We urge the City Council to pass this historic bill that will provide basic protections for New York's working families," said Bill Lipton, NY Working Families. 

"The 1099 economy is gaining momentum and we're becoming a Free Agent nation. At LiquidTalent, we match professional independent workers in the Technology and Creative sectors with exciting economic opportunities. Independent workers deserve to be paid on-time and in-full and we stand next to the Freelancer's Union in making this troubling non-payment issue a thing of the past," said Alex Abelin, CEO of LiquidTalent.

The “Freelance Isn’t Free” Act will now need to go for a vote with the Consumer Affairs Committee. All five of the committee members are co-sponsors of the bill, including Chairman Rafael L. Espinal and Council Members Vincent J. Gentile, Julissa Ferreras-Copeland, Rory Lancman, and Karen Koslowitz.

The legislation is backed by a broad coalition of supporters including: AFT, UFT, 32BJ SEIU, Make the Road, National Domestic Workers Alliance, National Guestworker Alliance, Kickstarter, General Assembly, Work Market, Freshbooks, New York Tech Meetup, American Sustainable Business Council, National Writers Union, Graphic Artists Guild, Contently, LiquidTalent, Managed by Q, Center for Social Innovation, Lower Manhattan Headquarters, Brooklyn Creative League, Promptly, Civic Hall, The Yard, Ask Domino, Moveon, Tycoon, and Musicians for Musicians.

About Freelancers Union:

Freelancers Union’s 300,000 members believe all workers should have the freedom to build meaningful, connected, and independent lives – backed by a system of mutual and public support. More than one in three working Americans is an independent worker. That's 54 million people – and growing. They are lawyers and nannies, graphic designers and temps. Freelancers Union serves the needs of this growing independent sector.