If you hire an independent contractor in NYC for any work over $800 you must have a written contract itemizing the services and creating a mechanism for timely payment. That’s the gist of the so-called NYC Freelance Isn’t Free Act that went into effect on May 15, 2017. We wrote about that law in November when it was enacted Independent Contractors Rights Bill Passed by New York City Council.
Considering how important independent contractors are to the NYC area transportation industry, New York City operators should be aware of the following issues:
- There must be a written agreement with any contractor for work over $800. This contract must include:
- The name and address of both the hiring company and the contractor.
- Itemization of all services provided by the worker, their value, and the rate and method of compensation.
- The date on which the contactor is to be paid or the mechanism by which a payment date will be decided. If neither is provided, payment is due within 30 days of completed work.
- Contractor must be paid on a timely basis and cannot be required to take less money in exchange for a faster payment.
- The burden of a written contract falls on the hiring party.
- Complaints may be brought by the contractor to the Director of New York City’s Office of Labor Standards. There is a two year window to file such a complaint. A guilty decision may result in double-damages as well as attorney fees.
- The City may bring civil action against companies where there is evidence of a pattern of non-compliance.
The law does NOT cover:
- Contractors earning W-2 income.
- Businesses of any form composed of more than one person
- Lawyers, doctors, or people in sales.
- City workers.
Surely there are issues big enough to drive a truck through, such as what if a non-NYC business uses a freelancer who lives in NYC (The law’s sponsors say “yes”, BTW). But these things will likely get litigated.
With this law, New York City is looking to set the tone for independent contractor reform. As more of the labor force is shifted to 1099 or freelance status due to the “gig-economy” it is reasonable to assume laws such as this become the norm.
See: Gothamist: NYC Freelance isn’t Free Act Goes into Effect