First-of-its-Kind Legislation Will Crack Down on Nonpayment Epidemic Facing NYC’s 1.3 Million Independent Workers

First-of-its-Kind Legislation Will Crack Down on Nonpayment Epidemic Facing NYC’s 1.3 Million Independent Workers

Freelancers Union Unveils “Freelance Isn’t Free Act,” Sponsored by City Council Member Brad Lander, with support from AFT, UFT, 32BJ, Kickstarter, Make the Road, New York Tech Meetup and National Domestic Workers Alliance

Average Amount Each Freelancer Loses to Deadbeats Every Year: $6,390

New York - Chanting “freelance isn’t free,” hundreds of graphic designers, domestic workers, accountants, writers, adjuncts and laborers converged on City Hall on Monday to unveil the “Freelance Isn’t Free Act” – first-of-its-kind NYC Council legislation cracking down on the explosion of deadbeat companies that stiff the city’s 1.3 million independent workers.

More than 70% of freelancers experience late or nonpayment at some point in their career, and they’re stiffed an average of $6,390 every year – forcing many to use credit cards or rely on government assistance to make up the difference.

“Independent workers are one of the fastest growing sectors of the workforce and the backbone of New York City’s economy — but they’re getting stiffed out of thousands of dollars every year by deadbeat companies,” saidFreelancers Union’s Founder and Executive Director Sara Horowitz, whose organization is leading the Freelance Isn’t Free campaign. “We need to update our old laws to protect the 1.3 million New Yorkers who are working in new ways.”

1-out-of-3 workers today is independent. They’re freelancers, solopreneurs, temps, independent contractors, moonlighters, and self-employed workers. But even as their ranks have continued to grow, they still have none of the same job protections and benefits as traditional 9-5 employees. 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.

Thousands of gig workers have shared wage theft horror stories with Freelancers Union, including:

  • Companies declaring bankruptcy and then re-opening to avoid payment
  • Gig workers being owed up to $17,000
  • Freelancers being evicted from their homes because landlords couldn’t wait any longer on rent

The legislation introduced today by NYC Council Member Brad Lander, Deputy Leader for Policy, aims to put an end to the nonpayment epidemic, providing NYC’s freelancers with equal protection from wage theft — including Department of Consumer Affairs protections and stiff penalties on deadbeats who refuse to pay.

“New York City is the freelance capital of the world. We have the opportunity to lead the nation in recognizing the vital contributions independent workers make to our economy – by ensuring freelancers get real protections against payment theft. I’m proud to work with Freelancers Union to submit first-of-its-kind legislation today to make sure all New Yorkers actually get the money they’ve earned, on time and in full,” said Lander.

The bill works by requiring any company who hires a freelance worker to execute a simple written contract, describing the work to be completed, the rate and method of payment, and date when payment is due. Deadbeat companies who refuse to pay, or try to force freelancers to wait months to get paid in full, would have to answer to the City’s Department of Consumer Affairs and face penalties, including double damages, attorney’s fees, and civil penalties.

Co-sponsors of the Freelance Isn’t Free act include Council Members Margaret Chin, Laurie Cumbo, Raphael Espinal, Corey Johnson, and Stephen Levin.

“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.

The Freelance Isn’t Free Act has broad support across the labor, business, and tech sectors, including from the 1.6 million-member American Federation of Teachers (AFT), which counts adjunct professors among its ranks.

“Workers should be paid for the work that they do—on time and in full. It’s that simple,” said Randi Weingarten, President of the 1.6 million-member American Federation of Teachers. “The AFT is committed to ensuring that independent workers in New York City and across the country have redress from wage theft. We urge the New York City Council to lead the country in standing up for working families and pass this groundbreaking piece of progressive legislation without delay.”

Additional prominent backers include the United Federation of Teachers (UFT), Service Employees International Union Local 32BJ (SEIU 32BJ), the National Domestic Workers Alliance, General Assembly, American Sustainable Business Council, Make the Road New York, Kickstarter, New York Tech Meetup, Brooklyn Creative League, The Yard, Civic Hall, Lower Manhattan Headquarters, Impact Hub NYC, Managed by Q, Contently, the National Writers Union, Ask Domino, Work Market, FreshBooks, Promptly, LiquidTalent, Center for Social Innovation, Graphic Artists Guild and Tycoon.

“Independent workers come from many different socioeconomic backgrounds but they’re vulnerable in similar ways. Whether you’re a day laborer, a freelance journalist or a self-employed CPA— if you work on your own, you’ve probably been a victim of wage theft at some point in your career,” said Hector Figueroa, President of 32BJ SEIU. “That’s why we’re coming together in this coalition. The union movement was built on solidarity and strength in numbers and that’s how we’ll win independent workers the equal protection they deserve.”

The legislation would have helped freelance theater technician Lily Meyer, whose client refused to pay her the $10,000 she was owed.

“Ten years ago, when the biggest challenge for freelancers was getting health insurance, we thought we'd be on the path to a level playing field for independent workers. Now, we're finding that getting paid is a growing problem, not because of a lack of work, but because of a lack of accountability,” said Meyer. “It's incredibly destabilizing not knowing if or when you'll be paid for your work - it causes tremendous anxiety and very real financial strain. With so many independent workers here in New York City, our City Council is right to step in and lead the way.”

The Freelance Isn't Free Act drew wide praise Monday.

“In the new economy, just like the old, workers should be able to count on getting paid in a timely fashion. This important legislation will ensure that independent workers have the necessary protections against unlawful payment practices. As a growing segment of our City’s workforce, freelance workers contribute greatly to our increasingly diverse and innovative economy. We need to stand with them in their struggle for the rights that other workers enjoy,” said Council Member Margaret Chin.

“Today, more than a third of this country’s workforce are freelancers. New York City, a highly populated epicenter for labor, needs to protect the rights of this significant, undervalued portion of our workers. The independent worker deserves fair treatment by employers who may take advantage of the ambiguity of freelance contracts and agreements. The passing of this legislation will require contracts to be put into writing to resolve such ambiguity as well as require employers to pay freelancers on a timely basis. It’s about time that all our city’s workers, independent or not, were treated fairly and justly,” said Council Member Laurie A. Cumbo.

“Freelancers make invaluable contributions to a variety of sectors and their hard work and dedication is 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 experience wage theft.  I am proud to support this legislation to give freelancers the protections they need and deserve,” said Council Member Stephen Levin.

“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. I applaud Council Member Lander for introducing this important bill, and I look forward to working with the Freelancers Union to ensure its passage,” said Council Member Ritchie Torres.

Backers of the Freelance Isn’t Free Act urged the NYC Council to stand with independent workers and pass the legislation without delay.

“If you do the work, you should be paid for it, on time, without some big legal fight. New York City’s proposed legislation will provide much-needed protection for freelance employees,” said Michael Mulgrew, President of the United Federation of Teachers.

“Payment protection is good for freelancers, but it's also good for businesses. It will help them recruit and attain top talent, take the guesswork out of billing and payroll, and put money back into the pockets of the very men and women they rely on – consumers. On behalf of our nearly quarter of a million members, we support this legislation, and we urge the City Council to make it a priority,” said David Levine, CEO of the American Sustainable Business Council, which has a network spanning more than 200,000 businesses across the country.

“More and more people are turning to freelancing because of the opportunity and flexibility it provides. But if we want to help these workers succeed, we need to make sure they receive the same protections as the rest of us. This historic legislation would be a major step in ensuring just that,” said Jeff Wald, co-founder of Work Market.

“Too many freelancers struggle with clients who refuse to pay or choose to pay way too late, causing them to dig into their savings or use personal credit to keep running their businesses. It’s only fair to level the playing field, and this legislation goes a long way toward making that happen,” said Mike McDerment, CEO and co-founder of FreshBooks.

New York Tech Meetup’s Board Chair Andrew Rasiej said New York City should be doing everything it can to attract and retain top talent:  “For New York to be the greatest city in the 21st century, we have to start by protecting the human capital in our massive and expanding gig-based workforce. Professionals from the growing tech sector and all of New York's traditional industries are looking to policymakers to make new laws that value and protect the pay of this rapidly-growing population of workers who represent a new foundation stone for our city's future economy"

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