If you hire freelancers in New York City, you’ve probably already heard about the “Freelance Isn’t Free” Act signed into law back in November. Now that it’s taking effect starting on May 15, 2017, most people we talk to have two questions: How does it affect me? Is it good news or bad news?
The answer to the second question isn’t entirely simple.
For freelancers, it’s great news, offering more recourse if things go wrong in a business relationship. The new law gives freelancers some of the privileges of companies and corporations without requiring them to register a business or trade name. Any time they’re earning more than $800 from an employer over a 120-day period, that relationship will require a written contract from now on.
On a day-to-day basis, for either party, the new law may mean more administrative hassle.
But for those hiring freelancers, even though it may seem like more trouble than it’s worth, taking the time to spell out your business relationship has a huge upside. Clarifying expectations like what the freelancer is doing and how much you’ll pay may help eliminate confusion and misunderstanding later on.
Competing in the global “gig” economy, many freelancers have turned home-based workplaces into mini-sweatshops, putting in long hours for sub-par wages. According to the Freelancer Union, which spearheaded the initiative, some 38% of NYC’s workers work freelance, and many have been exploited by late-paying and non-paying employers.
The new law requires that freelancer and employer set up payment terms in advance, and offers recourse to ensure timely payment and prevent employer retaliation or reduced compensation.
Although the law requires the city to set up an information program, including sample contracts in English and six other languages, we recommend creating a customized contract up front which will protect your business and assets from misunderstandings or breaches of the freelance relationship.
One final pitfall to avoid: Whenever you’re setting up a contract, make sure you specify whether the freelancer is providing “work for hire,” meaning you’ll own all rights to the work product, or licensing the work product to you on a one-time or limited basis. This applies to a range of creative content, including writing, art, programming, website design, or a range of other applications.
In addition to the possibility of court action, the new law also carries civil penalties up to $25,000 for gross violations or patterns of abuse. So protect your business and get legal advice on how these changes will affect you and your business before the law comes into effect this May.
Image Credit
The answer to the second question isn’t entirely simple.
For freelancers, it’s great news, offering more recourse if things go wrong in a business relationship. The new law gives freelancers some of the privileges of companies and corporations without requiring them to register a business or trade name. Any time they’re earning more than $800 from an employer over a 120-day period, that relationship will require a written contract from now on.
On a day-to-day basis, for either party, the new law may mean more administrative hassle.
But for those hiring freelancers, even though it may seem like more trouble than it’s worth, taking the time to spell out your business relationship has a huge upside. Clarifying expectations like what the freelancer is doing and how much you’ll pay may help eliminate confusion and misunderstanding later on.
Competing in the global “gig” economy, many freelancers have turned home-based workplaces into mini-sweatshops, putting in long hours for sub-par wages. According to the Freelancer Union, which spearheaded the initiative, some 38% of NYC’s workers work freelance, and many have been exploited by late-paying and non-paying employers.
The new law requires that freelancer and employer set up payment terms in advance, and offers recourse to ensure timely payment and prevent employer retaliation or reduced compensation.
Although the law requires the city to set up an information program, including sample contracts in English and six other languages, we recommend creating a customized contract up front which will protect your business and assets from misunderstandings or breaches of the freelance relationship.
One final pitfall to avoid: Whenever you’re setting up a contract, make sure you specify whether the freelancer is providing “work for hire,” meaning you’ll own all rights to the work product, or licensing the work product to you on a one-time or limited basis. This applies to a range of creative content, including writing, art, programming, website design, or a range of other applications.
In addition to the possibility of court action, the new law also carries civil penalties up to $25,000 for gross violations or patterns of abuse. So protect your business and get legal advice on how these changes will affect you and your business before the law comes into effect this May.
Image Credit