New York City’s newest independent contractor law could have an enormous impact on businesses that use ICs. On November 16, 2016, Mayor de Blasio officially signed the Freelance Isn’t Free Act, and the law could have serious consequences for businesses that use ICs in New York City.
Under the new Freelance Isn’t Free Act, any independent contractor has the right to sue for double damages, provided that:
Further provisions of the law indicate:
There are additional provisions under this law that can be read in detail here. The Freelance Isn’t Free Act will apply to all freelance contracts that begin on or after May 15, 2017.
Businesses who have some connection to New York City or who work with independent contractors who are connected to New York City could be affected by the Freelance Isn’t Free Act. These businesses should carefully consider the following important takeaways from this new legal development:
Conceivably, under the Freelance Isn’t Free Act, the costs for your business could be quite a large sum if your IC were to prevail in a claim. However, this does not mean that you must abandon the use of independent contractors or only select ICs who have a mailing address outside of NYC.
With this new law, businesses can continue to work with independent contractors in New York City, provided that business owners are familiar with the details of the law and carefully comply. To protect themselves, companies should clearly specify in written documentation the key terms of all their agreements with independent contractors, including proper names, mailing addresses, detailed itemization of services, the amount payable, method of payment, completion date, and payment date (or how the completion and payment dates will be determined).
As an extra protection, businesses should also include in their contracts:
In addition to all these contractual terms, businesses should also take special care to structure and implement their IC relationships in full compliance with all federal, state, and city laws. Doing so will guard against many potential issues related to independent contractors and employee misclassification.
Consultech preferred IC consultants can help your business draft legally compliant IC contracts and produce all necessary documentation. We can also help you structure a practical and sustainable compliant business relationship to ensure that you are not caught on the wrong side of the Freelance Isn’t Free Act or any other law. Our experts have 30 years of experience helping businesses who use independent contractors forestall claims. We are also prepared to legally represent you, should you find yourself in need of assistance with an independent contractor claim.
Call: (800) 769-2994