Independent contractor compliance can be complex and time-consuming. The landscape of federal, state, and local IC classification laws and regulations is continuously evolving, making proper classification critical. One significant upcoming state legislation to be aware of is the New York Freelance Isn’t Free Act (FIFA). Enacted by Governor Hochul on November 22, 2023, this legislation applies to contracts entered into on or after August 28, 2024.
FIFA Requirements include:
- Private employers who engage *independent contractors for services totaling US $800 or more over the preceding 120 days must have a written contract that includes specified information.
- Additionally, employers must pay the contracted compensation by the date specified in the contract (or the mechanism by which such date will be determined, i.e., payment terms).
- If the contract does not specify when the hiring party must pay the contracted compensation, the employer must pay no later than 30 days after the completion of the freelance worker’s services under the contract.
- All written contracts with freelance workers must be retained for at least six years. If the hiring party fails to keep these documents, it will be presumed that the terms presented by the freelance worker are accurate and agreed upon by both parties.
- FIFA’s regulations strictly forbid any employer from engaging in any form of harassment, discrimination, threat, intimidation, disciplinary action, or denial of work opportunities against freelance workers exercising or attempting to exercise their rights.
- The NY Department of Labor will provide model contracts for hiring parties and independent contractors to use (if needed) with terms that comply with the new law.
*Some exclusions apply.
Enforcement:
FIFA establishes penalties for violations, including statutory damages and attorney’s fees. According to the new law, not only can freelancers bring a civil action or file a complaint with the Department of Labor against hiring parties for failing to comply with the specified requirements, but New York’s attorney general also has the authority to pursue a civil claim.
What does this mean for organizations in New York?
With a month until FIFA’s effective date, employers who conduct business in New York should start planning compliance efforts. FIFA will have legal implications across all industries throughout the state.
As an experienced IC compliance partner, Atrium understands the legal landscape, streamlines the process, handles paperwork, ensures timely compliance, and provides expert guidance. Our clients can rest assured that all independent contractors we engage on your behalf in and outside the state of New York already have contracts with all the required information.
Our proprietary IC compliance tool, Engagent™, is designed to account for all federal, state, and local IC classification laws and regulations. It updates in real-time to keep up with the constant changes so that you don’t have to, and our IC experts are available to provide guidance should any new legal updates affect you or your workforce. Learn more about our IC Compliance Solutions here.
The information provided on this blog does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available here are for general informational purposes only.
