What Is The “Freelance Isn’t Free” Legislation

Timeline:

First, a little background on this legislation:

• October 2016: The initial iteration of the “Freelance Isn’t Free Act” (FIFA) is passed by the New York City Council
• March 2024: The “Freelance Isn’t Free Act” is amended, adding further protections for freelancers
• August 2024: The latest iteration of FIFA goes into effect

Where We Are Now

In the current version of the "Freelance Isn’t Free" legislation, freelancers are given essential rights around payment and contracts. The law mandates that any freelance project valued at $800 or more must be accompanied by a written contract outlining the scope of work, payment terms, and deadlines. It also allows freelancers to seek damages for delayed or non-payment, giving them legal recourse and additional protections.

What FIFA Means for Freelancers

This legislation is designed to reduce the challenges freelancers have faced around inconsistent payments and general financial instability. It sets firm guidelines on when and how freelancers should be paid. If a client fails to pay by the contracted deadline, or within 30 days of project completion, freelancers are now empowered to pursue legal action against the client. In fact, they can potentially recover double the amount they were owed, along with legal fees.

The result is that the “Freelance Isn’t Free Act” gives freelancers more peace of mind when taking on projects.

What FIFA Means for Small Businesses

The primary goal of the “Freelance Isn’t Free Act” is to aid freelancers. As such, the flip side to these benefits for freelancers is new challenges for businesses that work with freelancers. In order to adhere to the aforementioned guidelines, businesses must develop clearer contracts with firm payment terms, and they must be more diligent about managing freelance relationships. Failure to comply can lead to lawsuits, penalties, and reputational damage, which can all be particularly costly for smaller businesses.

It’s not all bad, though. Businesses that follow these guidelines can foster better relationships with their freelancers, increasing trust and collaboration.

What's Next

The "Freelance Isn’t Free" legislation is just one example of how governments are stepping in to protect independent workers. Nationwide, more freelancers are advocating for similar protections.

So, as these kinds of laws become ubiquitous, small businesses can set themselves to thrive in the long term by embracing these changes. Taking proactive steps to ensure compliance with existing and future freelance regulations can make your business an attractive client for freelancers.

How To Ensure Your Business Remains Compliant

The following are just some of the proactive steps small businesses can take to create fairer and more transparent work environments:

• Refine contract templates
• Set clear payment schedules
• Invest in software that helps manage contracts
• Monitor expansions of the “Freelance Isn’t Free Act” beyond New York

If working with freelancers is a key part of your operations, these actions will set your business up for future success. They will also help align your business with the new legal standards and avoid costly disputes.