The NYC Council just helped protect freelancers from getting stiffed

The NYC Council just helped protect freelancers from getting stiffed

Over one million New Yorkers work as freelancers or independent contractors. Unfortunately, most of them -- over 70% according to a Freelancers Union survey -- have been cheated out of payments that they’ve earned.

People like Elizabeth McKenzie, a freelancer in film production who lived on rolls and water, 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 30 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.

Like Ellen Sandles, who told us of persistent problems facing freelance court reporters, and Jessica Perez, who described rampant abuses in the modeling industry.

Today at the New York City Council we made history by passing new a law to make sure they get paid on-time and in full for their work.

By passing my legislation, Intro 1017-C (a.k.a. the “Freelance Isn’t Free Act”) into law, NYC is the first city in the country to provide protections against non-payment for freelancers and independent contractors. You can read more about the new law in GothamistCrain’s, and the Village Voice. Thank you to Freelancers Union for tremendous organizing and creative thinking in leading this charge, to my colleagues in the Council, to allies like the Brooklyn Chamber of Commerce, SEIU 32-BJ, NYC Tech Meet-Up, and especially to the freelancers who told their stories.

We need this law now more than ever. There are more American workers engaged in “alternative work arrangements” than ever before, from 10.1 percent in February 2005 up to nearly 16 percent in late 2015. It’s already hard enough for the growing number of freelance and independent workers to cobble together a decent standard of living - and when clients don’t pay it gets next to impossible, but that’s exactly what’s been happening.

71% of freelancers have had trouble getting paid, and freelancers are stiffed an average of $6,390 every year. To make matters worse, since most federal and state labor laws don’t apply to freelancers, when freelancers aren’t paid they have very little recourse. Just 5% of freelancers take delinquent clients to court, in large part due to the very high cost of hiring an attorney, and the unlikelihood for that lawyer to take the case “on spec.” Those freelancers that do bring deadbeat clients to court are often subject to retaliation - an especially big problem for freelancers that work through agencies, or on an on-going retainer.

The Freelance Isn’t Free Act aims to put an end to this growing nonpayment epidemic. Here’s how it works:

  • The law, which will apply to contracts of $800 and up, requires any company that hires a freelance worker to execute a simple written contract (it could be as simple as an e-mail), describing the work to be completed, the rate and method of payment, the date when payment is due, and basic contact information for both parties.  

  • Payment in full is required within 30 days of the completion of services or of the payment due date under the contract, whichever is later. Companies who fail to pay would face penalties, including double damages, attorney’s fees, and civil penalties.

  • Under the law companies would be prohibited from retaliation against freelancers who seek to exercise their rights under this bill.

The NYC Department of Consumer Affairs will act as a navigator for freelancers facing nonpayment. DCA will provide model written contracts in multiple languages, accept complaints from freelancers, issue a “Notice of Complaint” to hiring parties that don’t pay, and make it easier for an aggrieved freelancer to bring charges to court.

By passing this law, NYC is helping to address a big gap in state and federal laws for protecting workers. The Freelance Isn’t Free Act can serve as a model for cities across the country to take action to protect the growing number of “gig economy” workers. In the midst of partisan gridlock in Washington and in state capitals, cities can and must take the lead in writing new laws to keep up with a changing economy.

The challenges facing freelance, independent, contingent, gig, and shift workers do not end here, of course. As we outlined in a recent report from my office, Raising the Floor for Workers in the Gig Economy: Tools for NYC and Beyond, there is much more we should do: like extending the employment protections of NYC’s human rights law to independent contractors, helping establish “portable benefits funds” (I was pleased to co-sponsor a bill that would do that for taxi and for-hire drivers, sponsored by Council Member Corey Johnson), and making sure that fast-food and other shift workers have predictable and stable schedules.

For today, helping to make sure that Elizabeth, Mauricio, Raymona, Ellen, Jessica, and the other 1.3 million freelancers in NYC get paid -- on-time and in full -- for the work they do is a great step forward.

Let us know if you have any questions about the new law, and thanks as always for your support.

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