Wage-theft bill threatens employers with jail, requires contracts for freelancers

by Rosa Goldensohn

Furthering an effort to beef up the city's labor rules, the City Council is moving to require employers to provide signed contracts to freelancers they hire—and jail them if they don't pay.

Councilman Brad Lander on Monday introduced the Freelance Isn't Free Act, which would have the Department of Consumer Affairs enforce new rules for using independent contractors. Freelance work valued at more than $200 would require a written contract with a set payment deadline. The department would be able to slap employers with double damages for failing to provide and live up to contracts.

"I think we're looking to the market to be an enforcer," Sara Horowitz, whose Freelancers Union is behind the bill, said at a press conference.

Late-paying employers could also be jailed for up to three months. 

The Business Council of New York State, which represents employers, said the bill is unnecessary because the market weeds out bad actors naturally.

"Companies that don't pay freelancers properly, or on time, quickly find themselves unable to hire freelancers," spokesman Zack Hutchins said. "All this bill will do is put another law on the books that regulators will be unable to enforce and add to the burden of the 99% of business owners who act properly every day."

But the union claims freelancers lose more than $6,000 a year, on average, because of nonpayment.

Self-employed workers who file 1099 tax forms, from writers to domestic workers, would fall under the city law. Employees who work for wages can already file wage-theft complaints with the state's Department of Labor. The new bill would set up a parallel mechanism for local freelancers within Consumer Affairs, a mayoral agency currently led by Julie Menin.

Stiffed freelancers can already sue employers for unpaid fees under breach-of-contract laws. But the new bill would offer them more options for recourse, especially for workers without the means to hire lawyers, proponents say. Consumer Affairs could bring administrative charges or hit employers with violations and civil penalties.

Read the full article from Crain's New York Business.