The Freelance Employee Safety Act, an iteration of “Freelance Isn’t Free”, was signed into regulation by Governor Gavin Newsom on September twenty eighth, 2024. This laws, which was authored by Senator Scott Wiener, supplies protections for unbiased contractors who work for a hiring entity positioned in California.
Although freelancing represents a vital a part of California’s financial system, the prevalent difficulty of non-payment stays, reflecting a rising want to guard this very important workforce sector. In 2022, 60 million People freelanced, contributing $1.35 trillion to the nationwide financial system, with 71% reporting late or non-payment for his or her work. For these freelancers who function paycheck to paycheck, the absence of dependable cost programs has lengthy been a significant difficulty.
California’s Freelance Employee Safety Act immediately addresses these considerations by requiring written contracts for freelance companies valued at $250 or extra. These contracts should define the scope of labor, cost methodology, deadlines, and different necessary particulars—making certain transparency and equity from the beginning. Right here’s what you’ll want to know in regards to the regulation:
Key Definitions:
- Hiring Celebration: an individual or group within the State of California that retains a contract employee to supply skilled companies (excl federal, state, native, or overseas governments or people hiring companies for the non-public good thing about themselves, their relations, or their homestead).
- Freelance Employee: an individual that’s employed or retained as a bona fide unbiased contractor by a hiring get together to supply skilled companies in trade for $250 or extra (aggregating all contracts between the identical hiring get together in 120 days).
- Skilled companies: has the identical which means as that supplied beneath AB 5 and consists of companies corresponding to advertising and marketing, human sources, journey agent companies, graphic design, grant writing, advantageous artistry, pictures, videography, picture modifying, freelance writing, translating, modifying, illustrating, and others.
Key Provisions of the Freelance Employee Safety Act:
- Written Contract Requirement: Freelancers should have a written settlement in place for work totaling $250 or extra over a 120 day interval. The contract should clearly define the scope of companies, deadlines, compensation charges, and cost strategies.
- 30-Day Fee Phrases: Freelancers are entitled to cost inside 30 days of finishing their work, until the contract specifies in any other case. This provision eliminates the uncertainty many freelancers face when ready for cost.
- Anti-Retaliation Protections: Freelancers are protected against any retaliation by hiring entities in the event that they assert their proper to honest cost beneath the regulation.
- Enforcement and Authorized Cures: If a consumer fails to pay, freelancers can search authorized recourse, together with double damages and the restoration of legal professional’s charges. Each freelancers and public prosecutors can file claims to make sure compliance with the regulation.
What Does This Imply for California Freelancers?
Freelancers will quickly be capable to function with better safety, understanding that they’ve authorized protections for well timed funds and written contracts. Very similar to freelancers in Illinois and New York, who’ve benefited from related legal guidelines, California freelancers will now be capable to implement fundamental rights with extra confidence.
Trying Forward
Though the regulation doesn’t take impact till January 2025, freelancers and companies alike ought to begin making ready. Freelancers can start utilizing written contracts now to make sure compliance and set clear expectations with purchasers. Equally, companies that continuously rent unbiased contractors ought to familiarize themselves with the brand new necessities to keep away from penalties or disputes down the road.
“The selection to freelance shouldn’t be a option to be exploited by your employer,” mentioned Senator Wiener, sponsor of the invoice. “As freelancers turn out to be a better and better share of the labor market, it’s important that we increase protections to make sure this profession path is financially viable. This invoice supplies these lengthy overdue protections, and I thank the Governor for championing the rights of working individuals.”
“Unbiased employees throughout all industries are drawn to California in pursuit of their desires. Sadly, circumstances of non-payment by purchasers make these desires more durable to pursue,” mentioned Rafael Espinal, Government Director of the Freelancers Union. “I commend the creator of this invoice, Senator Wiener, for his help and dedication to this important workforce. This laws will set up cost protections as the usual for all employees, offering a significant victory for the hundreds of thousands of freelancers who play a big function in boosting the state’s financial system.”
California’s Freelance Employee Safety Act builds on the momentum of comparable laws nationwide. Because the adoption of New York’s “Freelance Isn’t Free Act” in 2017, freelancers there have reclaimed over $2.5 million in unpaid invoices. With California now setting related requirements, we anticipate a big optimistic influence for the state’s freelance workforce, and hope this motion continues to increase throughout the nation.
For extra particulars on the regulation, you possibly can learn the complete invoice right here: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB988
And should you want any help making a contract, you should utilize our FREE contract creator right here: https://freelancersunion.org/contract/