When it comes to the Freelance Isn't Free Act, out with the old and in with the new (A8535).
The old law (Labor Law 191-d) was supposed to take effect on May 20, 2024 - no more.
Now, a new version of the statewide Freelance Isn't Free Act will become effective August 28, 2024 and it authorizes the NYS Attorney General to sue and enforce the law.
This version, passed on March 1, 2024, is at General Business Law Article 44-A.
The new law applies to "one natural person" who earns at least $800 from the same hiring party within 120 days, except that the law doesn't apply to:
- Independent contractor who solicit manufacturing orders in New York State;
- Lawyers;
- Doctors; and
- Construction contractors.
Under the new law, freelancers must be paid no later than when payment is due under the contract or within 30 days after completion of the freelancer's services under the contract.
More importantly, all freelancers have a right to a written contract (hiring manager must keep for at least 6 years) that includes, at a minimum,
- The name and mailing address of both the hiring party and the freelancer;
- An itemization of all services to be provided by the freelancer with their value and the rate / method of compensation;
- Payment date or method to determine such date; and
- Invoice date by freelancer.
Remember, the big change is that the NYS Attorney General is now involved, has a right to demand a copy of these contracts, and a failure to provide the contract to the Attorney General works a presumption that the freelancer's allegations of what is in the contract are correct.
More so, the Attorney General is authorized to bring a lawsuit to enforce the law and obtain restitution for freelancers plus a penalty of $1,000 for a first violation $2,000 for a second violation, and $3,000 for a third and subsequent violations.
Additionally, freelancers have a private right of action that can be brought within 2 years, or 6 years if it's for untimely payment or discriminatory retaliation after such freelancer insisted on their rights under the Freelance Isn't Free Act.
Get this, untimely payment also gives the freelancer the ability to sue for their attorneys' fees and may give them the ability to obtain double damages in certain circumstances.
Finally, there is a $25,000 penalty against hiring managers that violate the law by a pattern or practice. So, hiring managers - ALL NYS REAL ESTATE BROKERS - you better update your contracts immediately.
