Freelance work and the so-called “gig economy” have come to represent an enormous element of the modern labor force, with at least 27% of American workers engaging in some freelance or temporary “gigs” in 2016. Now—at least in New York City—the law is beginning to catch up with the new economic realities: NYC’s Department of Consumer Affairs (DCA) has adopted a set of final rules to accompany the “Freelance Isn’t Free” Act. These new rules expand upon the act by strengthening retaliatory protections for freelancers and limiting the provisions freelance workers can waive in contracts.
While the act itself defines freelance workers in very broad terms as any independent contractor who is retained to provide services at a fee, the DCA’s rules—which took effect on July 24—go even further in terms of employee protections.
One of the most prominent places where the rules elaborate on the original act is in the realm of retaliatory protections. Now, if employers or hiring parties retaliate against freelance employees who exercise their rights under the act, including through the denial of future work opportunities, the freelancer has grounds to file retaliation claims. The rules allow for freelance workers to establish that the “cause” element of retaliation claims was an exercise of their rights under the act that served as a “motivating factor” for retaliatory or adverse action, even if the exercise of their rights was not the sole factor behind the retaliation.
Furthermore, regardless of a freelance employee’s immigration status, actions taken against them by the hiring party on the basis of their immigration status qualifies as retaliation under the DCA’s new rules.
Additionally, the rules place strict restrictions on the rights freelance employees can waive in contracts and stipulates that contracts where freelancers waive rights under the act would be rendered void—a key element of the rules, especially since the act itself mandates contracts for all freelance employees who receive more than $800 within a 120-day window from the same employer.
Freelance employees are thus unable to waive or limit their rights under the act; their rights to collective actions or representative proceedings; nondisclosure provisions that would prevent them from disclosing the terms of their contracts to the director of the DCA; and “any other procedural right normally afforded to a party in a civil or administrative action.”
Like all good deeds, there can be unintended consequences to this. Homeowners who employ domestic help or gardeners may switch to companies that provide these services to avoid potential disputes and paperwork created under this act; thus, freelancers could become unemployed. Let’s keep an eye open as to what happens with this legislation.