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December 17, 2020

Q: What is the Freelance Isn’t Free Act?

Learn how to apply the requirements of the New York City statute known as FIFA.

Ask Liquid: What is the Freelance Isn't Free Act in New York?

Compliance Ask Liquid Finance and Accounting Freelancer Management

New York City’s Local Law 104 of 2016 has been in effect since May 15, 2017. The law’s official title is the Establishing Protections for Freelance Workers Act but it is more commonly referred to as the Freelance Isn’t Free Act or FIFA. The Act applies to all freelance agreements and contracts for work completed within New York City (NYC) and may apply to other work if a portion is completed within NYC, if the worker is hired / retained in NYC, or the operations of the hirer are within NYC.

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Freelancer Rights and Protections

The law encompasses several rights for freelance workers, in particular the right to a written contract, timely and full payment, and protection from retaliation. The law also defines the penalties for violating these rights. These penalties include statutory damages, double damages, injunctive relief, and attorney’s fees. 

Written Contracts

If the contracted work is for $800 or more, the contract must be in writing. This requirement also covers work through multiple agreements – so if the total worth of all the contracted work is $800 or more within a 120 day period, you must have a written contract(s) for all of the work. Every contract must include the names and mailing addresses of the freelancer and hiring party, specifics of the work to be performed by the freelancer, what you will pay for the work, and the date by which the freelancer will be paid. Both parties must keep a copy of the contract.

It’s easy for Liquid users to create contracts and work orders. You can either utilize our contract template or your own custom agreement to establish a contractual agreement with a freelancer. The signed agreements are securely stored, with both parties having easy access to all documents.

Timely and Full Payments

The hiring company must pay the freelancer for the contracted work within 30 days after the completion of the work. If the payment is late or unpaid, the freelancer can file a complaint with the Office of Labor Policy & Standards (OLPS). to investigate. 

Liquid users can schedule payments in advance to ensure that payments are completed within the required window for FIFA.

Protection from Retaliation

Companies cannot “penalize, threaten, blacklist, or otherwise deter workers from exercising their rights” as defined in FIFA. If a freelancer is threatened or experiences other forms of retaliation, he/she can file a complaint with OLPS.

FIFA Exclusions

FIFA includes freelancers that are sole proprietors whether established as sole proprietorships, LLCs, S-Corps, or C-Corps. However, FIFA does not include freelancers or contractors who have employees. FIFA also excludes lawyers, licensed medical professionals, freelance sales consultants, and anyone providing services to New York City, New York State, or the federal government. FIFA also doesn’t cover employees. Make sure that you are correctly classifying your workers as employees or independent contractors / freelancers.

With Liquid, it’s easy to ensure that your company is complying with the contractual and payment requirements of the Freelance Isn’t Free Act. 

Ready to improve your freelancer compliance procedures? Try Liquid today

Category: Compliance Ask Liquid Finance and Accounting Freelancer Management

Updated: December 17, 2020

Quick note: This is not to be taken as tax advice or legal advice or payroll advice. Since tax rules and laws change over time and can vary by location and industry, consult a CPA / tax advisor and/or attorney for specific guidance.

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