In Landmark Victory, Millions of NYC Gig Economy Workers Win Wage Theft Protections

In Landmark Victory, Millions of NYC Gig Economy Workers Win Wage Theft Protections

Historic Law First in the Nation to Extend Social Safety Net to Growing US Independent Workforce

Supported by Freelancers Union & Introduced by NYC Council Member Brad Lander, ‘Freelance Isn’t Free’ Act Could Serve as Model for Cities Across Country

New York – In a landmark victory for the nation’s 55 million independent workers, the New York City Council today passed the “Freelance Isn’t Free” Act – first-of-its-kind legislation that extends the social safety net and provides millions of NYC freelancers with unprecedented wage theft protections. The bill (Intro. 1017-C), supported by Freelancers Union and introduced by NYC Council Member Brad Lander, is a milestone moment for the gig economy and freelancers’ rights. The law could have national implications by serving as a model for other cities to follow.

“The nature of work is changing, and 35 percent of the American workforce has turned to freelancing as a way to fulfill their goals. But our social infrastructure hasn’t kept up with this change, and many freelancers struggle with basic things like getting paid for the work that they do,” said Freelancers Union Founder and Executive Director Sara Horowitz. “This legislation represents a major turning point for the gig economy, and I’d like to thank the NYC Council for their vision and leadership in helping create a new safety net work for our city’s independent workforce. We are now calling on other cities to follow New York’s lead in providing the basic protections freelancers need and deserve.”

More than 70% of freelancers experience late or nonpayment at some point in their career, and they’re stiffed an average of nearly $6,000 every year – forcing many to use credit cards or rely on government assistance to make up the difference. The “Freelance Isn’t Free” Act will now provide NYC’s freelancers with equal protection from wage theft. It will also require 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 the date when payment is due. Companies that refuse to pay, or try to force freelancers to wait months to get paid in full, will have to face penalties, including double damages, attorney’s fees, and civil penalties.

“Today, New York City is becoming the first city in the nation to protect freelancers and independent contractors from getting stiffed,” said Council Member Brad Lander. “This means new protections for NYC’s 1.3 million freelancers – for people like Elizabeth McKenzie, a freelancer in film production who lived on bread and rolls, and worked in the dark because she couldn’t pay her utility bills after getting stiffed for $2,500 she had earned. Like Mauricio Niebla, part of a group of 40 writers and editors cheated out of a total of $400,000 by a national publishing company. Like Just Raymona, a pattern-maker from the Bronx, who paid the people she owed out of her savings when she was stiffed, but couldn’t pay her own rent or phone bill. The Freelance Isn’t Free Act will make sure all workers can get paid for their work, on-time and in full. Thank you to the Freelancer’s Union for their leadership, to Speaker Mark-Viverito, and to my Council colleagues for helping NYC lead the way in writing new rules for the economy, so all workers have the supports and protections they deserve.”

One out of every three workers today is independent. They’re graphic designers, painters, writers, programmers and more. 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, until now there were only two options: sue, or walk away. The “Freelance Isn’t Free” Act aims to address this and provide recourse for stiffed independent workers.

“I love freelancing - it enables me to do what I love, and have the flexibility in my schedule to pick my son up from school. But waiting 60, 90 or 120 days to get paid isn't a risk my landlord is willing to take, and my credit card companies aren't flexible on their due dates,” said Melissa Thornton, freelance graphic designer. “The Freelance Isn't Free Act will give me the security I need to provide for my family along with my husband, a small business owner.”

Over half the NYC Council co-sponsored the “Freelance Isn’t Free Act,” including Council Members Espinal, Kallos, Menchaca, Levin, Koslowitz, Williams, Torres, Reynoso, Van Bramer, as well as Public Advocate Letitia James, and Manhattan Borough President Gale A. Brewer.  

“Every New Yorker deserves to be compensated for their honest and hard work,” said Public Advocate Letitia James. “More than 70% of freelancers report being cheated out of payments or not being paid what was promised simply because they are freelancers. The Freelance Isn’t Free Act will protect freelancers by holding employers accountable for non or late payment, ensuring that every hard working individual gets the compensation they deserve.”

“As the economy changes, our laws have to change with it to protect workers and guarantee fairness,” said Manhattan Borough President Gale A. Brewer. “The Freelance Isn’t Free Act is an important step to hold employers accountable and make sure freelancers are paid, in a world where the ‘gig economy’ and freelance work have dramatically expanded.”

“From graphic artists, to writers, to website developers -- freelance workers are a beneficial and integral part of both our society and our growing economy. It is time that we address the unique challenges freelancers face and support the important work they do. Today I am proud have passed
the “Freelance Isn’t Free Act” in the Consumer Affairs Committee, which I chair, and I urge our Council colleagues to support this action so that freelancers may get the protections they deserve,” said Council Member Rafael Espinal, Chair of the Council’s Committee on Consumer Affairs.

“Artists are vitally important to not only New York City’s economy, but our soul as well,” said Council Majority Leader and Cultural Affairs Chair Jimmy Van Bramer. “If we want our city to remain the cultural capital of the world, we must take steps to ensure artists get paid in full and on time. The common-sense policies in the Freelance Isn’t Free Act will help artists continue to thrive.”

"Wage theft has no place in New York City. Introduction 1017-C is a big step toward ensuring the city's 1.3 million freelancers are treated fairly and with respect," said Council Member Ben Kallos. "Making it in the big city is already tough enough; aspiring writers, actors, and artists need the protection of this legislation."

“Freelancers deserve wage protections and employment fairness,” said Council Member Carlos Menchaca. “Non-traditional employment relationships shouldn’t be an excuse to cheat workers or withhold wages. Requiring employment contracts, agreed rates and penalties for failure to pay will protect people who contribute so much to our economy and are among the most vulnerable workers.”

“Our city’s freelance workers deserve protections that prevent the wage theft and blatant abuse that is all too common,” said Council Member Stephen Levin. “Routine nonpayment of work is more than an inconvenience—it is an injustice. Establishing common sense safeguards by requiring contracts between parties and mandating timely payments will make all New Yorkers better off.”    

"This legislation simply put is about fundamental fairness and equity," said Council Member Karen Koslowitz. "All too often freelance workers laboring in our city were left twisting in the wind if they wanted to seek remuneration for services rendered.  It's time our freelance workers were protected from wage theft and late payments.  This legislation does just that by providing an effective legislative framework to protect these workers from unscrupulous employers seeking to take advantage of their freelance status.  I am proud to be a sponsor of this key legislation which protects our working families."

“Everyone deserves to get paid for an honest day’s work,” said Council Member Jumaane D. Williams. “Seven out of 10 freelancers in New York City  struggle to collect pay for services they’ve delivered to businesses. That is unacceptable. This put freelancers in a difficult position where they are forced to live in a state of uncertainty, and jeopardizes their financial stability.”

“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 will finally provide necessary protections to the City’s independent workforce, and make NYC the nation’s leader in protecting freelancers,” said Council Member Ritchie Torres.

Council Member Antonio Reynoso said, “With the City’s rising cost of living, many New Yorkers are turning to freelance work to supplement their incomes, and more than a million New Yorkers depend on freelance income for either some or all of their wages.  We don’t tolerate wage theft in any industry, and we won’t tolerate it for freelance workers, either.  The Freelance Isn’t Free Act gives these workers peace of mind in knowing they will be compensated for their time, and sends a message to employers that they cannot take advantage of workers just because they are freelancers.”

Additional prominent backers include the United Federation of Teachers (UFT), Service Employees International Union Local 32BJ (SEIU 32BJ), the National Employment Law Project (NELP), the National Domestic Workers Alliance, WeWork, General Assembly, American Sustainable Business Council, Brooklyn Chamber of Commerce, Make the Road New York, Kickstarter,  Work Market, New York Tech Alliance, FreshBooks, National Guestworker Alliance, the National Writers Union, Partnership for Working Families, ALIGN: The Alliance for a Greater New York, American Society of Media Photographers, Brooklyn Creative League, The Yard, Civic Hall, Grind, Impact Hub NYC, Lower Manhattan Headquarters, Impact Hub NYC, Managed by Q, Contently, Musicians for Musicians, Ask Domino, Promptly, Center for Social Innovation, Graphic Artists Guild, Painless 1099, Tycoon, AND CO, and Soply.

“Freelance workers deserve the decency to be paid for work they’ve done. I’m thrilled New York City is taking the lead in passing landmark legislation and hope it is used as a model for cities across the country for needed protections for freelancers,” said Randi Weingarten, president of the American Federation of Teachers.

“The NYC Council is taking the lead and passing first-of-its-kind legislation to protect the rights of freelancers and ensure they are paid on time,” said 32BJ President Hector Figueroa. “Just like all workers, independent workers deserve to be paid on time and in full for the work that they do. Before this law was passed these workers had little recourse against wage theft but now they have a tool to ensure they get a fair day’s pay for a fair day’s work.”

"When a freelancer's work is completed, he or she deserves to be paid promptly. Anything else is unacceptable," said Vincent Alvarez, President of the New York City Central Labor Council, AFL-CIO. "By ensuring that these workers are paid in a timely manner, this legislation will help ensure that freelancers have the financial freedom to care for themselves and their families, an important step towards ensuring that all workers receive fair wages, safe working conditions, and employee protections.”

"As a provider of space, services, and community to freelancers, WeWork is a proud proponent of the Freelance Isn’t Free Act and we are delighted that the NY City Council has passed this first-of-its-kind legislation. Independent contractors and freelancers make up 35% of the US workforce and a thriving segment of the WeWork community. Legislation will ensure not only a fair deal for freelancers but also provide a template for other cities across the country to take up the mantle and enact similar legislation," said Adam Neumann, co-founder and CEO, WeWork.

"All workers deserve to be paid properly and on time for the work they do -- simple as that," said Haeyoung Yoon, director of strategic partnerships at the National Employment Law Project. "This bill makes sure that the millions of workers freelancing in New York City get the pay they earned when they earn it, and we congratulate Freelancers Union for this important victory."

"Make the Road commends Mayor de Blasio, Speaker Mark-Viverito, and Councilman Lander for their work in passing this important legislation,” said Deborah Axt, co-Executive Director, Make the Road New York. “Everyone deserves to be fairly compensated for their labor. Unfortunately, wage theft continues to be a problem of epidemic proportions in New York, with millions of workers impacted each year. Due to the advocacy of the Freelancers Union and their members, we know that freelance workers are not immune from this problem. This legislation empowers freelancers with the tools they need to secure just compensation for their work and hold companies accountable when they fail to honor their contracts. In doing so it marks a powerful step forward in combating wage theft for all workers.”

"The Freelance Isn't Free Act is precisely the type of progress that will help ensure that the future of work is one where everyone who works is protected from unscrupulous employers and able to work with dignity,” said Ai-Jen Poo, director of the National Domestic Workers Alliance. “We were proud to partner with the Freelancers Union on passing this needed legislation."

“Because technology and other 21st century economic forces are changing the not only the workforce but the nature of work itself, it is imperative that the laws protecting the workers themselves keep up to make sure the marketplace stays fair," said Andrew Rasiej, Chairman of the NY Tech Alliance, “With this legislation New York City Council is showing national leadership in protecting the rights of freelancers who will soon be the majority of our country’s working population.”

“With 55 million freelancers currently working in the U.S., there’s no denying that everyone benefits from a more predictable relationship between independent workers and their clients," said Mike McDerment, co-founder and CEO of FreshBooks, a cloud-based accounting software platform that has served over 10 million people, including more than 100,000 users in New York City. “Nonpayment is a major pain point for this emerging workforce, and ultimately taxes productivity. The Freelance Isn’t Free Act levels the playing field for self-employed people and is a model for cities in the 21st century.”

“Freelancers work just as hard and are just as ambitious as people with 9-to-5 jobs,” said Brooklyn Chamber President and CEO Carlo A. Scissura. “The Freelance Isn’t Free Act will help to cover this vital and expanding group of American workers with the same legal protections and benefits that all other workers enjoy.”

"This is a historic day for millions of Americans around the country that rely on freelance income to support their families," said Jeff Wald, Co-Founder of Work Market. "We're honored to have worked with the Freelancers Union to help enact this landmark legislation and look forward to carrying this momentum to the national stage."

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