New York State’s new “Freelance Isn’t Free Act” (FIFA) takes effect on May 20, 2024, adding new legal protections for freelance workers to ensure they are timely paid.  In most respects, this new law in New York State aligns with the version that New York City enacted seven years ago.  Contracting organizations in New York City should note the subtle differences, and those in the rest of the state need to quickly familiarize themselves and become compliant with the new requirements.

Key Elements of FIFA

The New York State and New York City versions of FIFA both require written contracts when a freelancer is engaged for work with a value of at least $800.  The New York City law clarifies that the $800 contract value is measured based on the worth of work by itself, or by aggregating all other contracts between the parties within a 120-day period.

Sales representatives, lawyers and licensed medical professionals are excluded from both the state and city versions of the law.  New York State also expressly excludes construction contractors from its version of the law.

The following information must be included in the contract:

• The name and address of the freelancer and the hiring party;
• An itemized list of services to be provided;
• The value of services to be provided;
• Rate of pay;
• Method of pay; and
• Payment date – and if no date is specified, payment is required within 30 days from when the work is completed.

New York State additionally requires that the contract include the date the freelancer must submit a list of services rendered under the contract to the hiring party.  The state requires the hiring party to retain their contracts for a minimum of six years, consistent with the state’s six-year limitations period for wage claims.

Both the state and city versions prohibit hiring parties from retaliating against freelancers for asserting their rights under the law. They also state that any attempt by the contracting party to waive their rights under FIFA will be void as against public policy. Repeat offenders can be subject to civil penalties of up to $25,000.

Freelancers in New York City can file a complaint with the Office of Labor Standards within two years of the alleged violation, or in civil court within six years. The process is the same in New York State, except the complaint is to be filed with the Department of Labor.  Under New York State law, claims for a failure to comply with the written contract requirements must be filed within two years, while claims based on delayed or nonpayment or for retaliation must be filed within six years of their occurrence.

Lessons Learned from Cases Applying the NYC Law

FIFA has been actively litigated by freelancers and hiring parties since it took effect in 2017.  The court decisions in these cases highlight certain considerations for hiring parties.

Applicability to Remote/Nonresident Workers

The City Consumer Affairs FAQs on FIFA  take the position that whether the law applies to freelancers who are not residents of the city depends on “the overall circumstances,” including whether at least some of the work is performed in the city, whether the freelance worker is hired or retained in the city, or if the hiring party has significant operations in the city.

Courts that have looked at this issue thus far held in one case that a non-New York City resident who worked remotely and attended a few meetings for work in the city could not invoke FIFA’s protections because the vast majority of his work was performed in Connecticut.  In contrast, a resident of the Netherlands was held to fall within FIFAs scope because he was hired specifically to perform work relating to a mural at a NYC bar.

Qualifying as a “Freelance Worker”

The New York appellate court has additionally held that workers represented by agents, specifically a fashion model represented by a modeling agency, are not expressly excluded and therefore may fall within FIFA’s protections.

Services Not Performed

 FIFA provides relief for freelancers to recover for services performed, where money is owed or money was untimely paid.  One recent trial court decision made clear that a freelancer cannot rely on FIFA for a claim based on services the individual would have performed had the freelancer not been terminated.

 Failing to Respond to the Complaint

Most significantly for hiring parties, ignoring a FIFA complaint erodes the hiring party’s ability to defend itself.  Multiple cases resolved in favor of the freelancer have invoked the following clause in FIFA: “When a hiring party fails to respond to a Notice of Complaint within 20 days it creates a rebuttable presumption in any civil action commenced pursuant to [FIFA] that the hiring party committed the violations alleged in the complaint.” Hiring parties should therefore be aware of this presumption and be sure to promptly respond to a Notice of Complaint.

Next Steps

Organizations that retain freelance workers should review their current contract templates to ensure compliance and get legal advice if they are uncertain how those agreements should be drafted.

By Julie Ficks and Tracey Levy