Protecting Freelancers from Getting Stiffed

Protecting Freelancers from Getting Stiffed

New York City is the freelance capital of the world, with over 1.3 million freelancers, so many of them right here in Brooklyn. More and more people are working “by the gig” (as graphic designers, film producers, for-hire drivers, nannies, and much more), rather than for a regular paycheck.

But despite the rapidly growing percentage of workers who are paid this way, our laws have not kept up with our changing economy. As a result, gig economy workers don’t have the protections and benefits of traditional employees.

One consequence: more than 70% of freelancers report having been stiffed out of payments they were owed – by being paid too late, too little, or not at all – to the tune of $6,390 every year, on average. I’ve heard stories from individuals who were cheated out of tens of thousands of dollars they were owed.

Everyone deserves to be paid for their work, on time and in full. So on Monday, in partnership with the Freelancer’s Union, I introduced the “Freelance Isn’t Free Act.” 

We were joined by many of my City Council colleagues, SEIU 32-BJ President Hector Figueroa, NY Tech Meetup Founder Andrew Raisej, Make the Road NY, and many freelancers (you can read coverage in the Washington Post, or see Intro 1017 in full)  

The Freelance Isn’t Free Act is first-of-its-kind legislation that would provide freelancers with protection from nonpayment. 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 face penalties including double damages, attorney’s fees, and civil penalties. Freelancers could seek redress through the NYC Department of Consumer Affairs, or by going to court. Our approach is modeled on similar protections that traditional employees have against wage-theft, through the State Department of Labor.

I’m looking forward to working with Freelancers Union, my colleagues, the business community, advocates, and many of you to move this legislation forward. We hope to have a hearing on the bill early next year, and I welcome your feedback and ideas.

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This legislation is just one part of broader efforts to provide protections and support for workers in our changing economy.

There’s no doubt the growing “on-demand” economy has made life more convenient. Consumers can arrange for services at the tap of a touchscreen. Workers can choose their hours and earn a little extra cash.

But there’s a very dark side to the “sharing” economy: the benefits aren’t usually shared with the workers. 

In addition to the problems freelancers face with getting stiffed, working by-the-gig provides much less job security than a traditional career – and it almost never provides health insurance, paid sick days, paid family leave, workforce development, or retirement security. Day laborers get misclassified and denied their rights as employees. For-hire drivers lack the right to organize and bargain collectively.

Cities are taking the lead in writing new rules for the new economy. At the “Local Progress” convening in Los Angeles in November, I had the chance to join with city council members from across the country to develop a plan for bringing some fairness to the on-demand economy.

In addition to the Freelance Isn’t Free Act, here’s some of what we’ll be looking at in the coming months:

-- Yesterday, I also introduced this bill to extend the protections of NYC’s strong human rights law to independent contractors (along with seasonal and contingent workers). All workers should be protected from discrimination, regardless of what tax form they get. 

-- Council Member Corey Johnson and I are working with the New York City Taxi Workers Alliance and the NYC Taxi & Limousine Commission to create a “driver benefits fund” (funded by a small fare surcharge) to provide for-hire drivers with health care and other benefits.

-- NYC’s recently-authorized Office of Labor Standards can help make sure that conventional employees aren’t illegally misclassified as independent workers by employers trying to cheat them out of benefits and protections (a big problem especially for day-laborers and domestic workers).

-- Also, over in Seattle, their City Council is moving forward with a bill that would allow drivers for Uber, Lyft, and other for-hire vehicle companies to organize and bargain collectively so that workers have some voice in the terms and conditions of their work.

Ultimately, we will need national regulation to match the growing on-demand economy. But with gridlock in Washington, cities are leading the way to bringing worker protections into the 21st century — and some real sharing into the sharing economy.

With your help, I plan to make sure that NYC is leading the pack.

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