In a move likely to have ripple effects nationwide, a new law in New York City will stiffen the penalties for nonpayment of freelance contracts. The effort came about thanks in no small part to the work of the Freelancers Union, which mobilized its members—many of whom are based in the city.
In a city perhaps more defined by freelance work than anywhere else in the world, new protections are being put into place to ensure workers get paid. And a group that fought for New York City to change its rules is celebrating a big win as a result.
The Freelancers Union, an organization with characteristics of both an association and a traditional union, pushed hard for the Freelance Isn’t Free Act, which the city council passed unanimously last week.
Once you start to see the market function, companies start to know they can’t do this.
The law will require written contracts for freelance work in excess of $800. Contracts must include a specific timetable and approach for payment—or suffer legal penalties for failing to do so. A client who reneged on payment would be liable for punitive damages of twice the amount the freelancer was owed, as well as legal fees and additional penalties for other contract issues.
That’s a significant change for freelancers, who, according to the Village Voice, previously would have had to take complaints of nonpayment to small claims court, often without a contract and where damages were limited to $5,000.
That New York City is the first in the country with such a rule makes sense: According to the Freelancers Union, 38 percent of working adults in the city do some form of freelance work. Many of the organization’s members are based there and helped to drum up local attention for the issue in the form of petitions, rallies, and City Council testimony.
Stoking Lawyer Interest
In comments to The New York Times, Freelancers Union Executive Director Sara Horowitz said the punitive damages provision will encourage lawyers to take freelance cases seriously.
“It starts us looking at a new form of enforcement—now it’s worth a lawyer’s time to start taking cases, you’re building up a marketplace,” Horowitz said. “Once you start to see the market function, companies start to know they can’t do this.”
As Money magazine notes, the passage of the law in the country’s most prominent freelance market is expected to reverberate nationally. That’s where the Freelancers Union is aiming its sights next: Its online petition in support of the New York City measure had more than 8,000 signatures. Now the petition is being retargeted at other cities around the country. As of Monday, it had nearly 10,000 signatures.