If you own or operate your business out of New York City, or hire New York City residents as contractors, both of these new regulations apply.
Freelance Isn't Free Act — effective as of May 15, 2017
Any New York City freelancer hired by private employers will have new rights and protections under the new NYC "Freelance Isn't Free Act" (FIFA). This law governs all freelance agreements entered to or on after May 15, 2017.
Under FIFA, for all contracts valued at $800 or more (including small projects that add up to $800 over a 120-day period), hiring parties will have to enter into written contracts with freelancers. The contract must include:
- Name and mailing address of hiring party and freelance worker;
- Itemization of all services to be provided;
- Value of all services to be provided;
- Rate and method of compensation;
- Date on which the hiring party must pay the freelancer, or how that date will be determined.
In general, freelancer contracts should also include language governing confidentiality, non-disclosure of information, intellectual property ownership, and statements acknowledging that the freelancer understands his/her role as an independent contractor and not an employee.
Moreover, the new law guarantees freelancers the right to timely and full payment for services rendered. Timely payment is accordant to the contract, or if not explicitly stated, no later than 30 days after the completion of freelancer services. The law also specifies that once a contractor has begun work, the hiring party may not offer less compensation than agreed upon as a condition of timely payment.
A company has 20 days to respond to any complaints filed by a freelancer, and fines can include double damages of the value of the contract, plus attorney fees, plus a civil fine of up to $25,000.
Salary History Ban — effective Nov. 1, 2017
In what is being hailed as a "major step toward achieving pay equity for women and people of color," Mayor Bill DeBlasio on May 4 signed a new bill prohibiting all NYC employers from asking prospective employees about their salary history.
The law declares that is unlawful for any employer to inquire about or rely upon the salary history of a job applicant to determine the salary amount during the hiring process and in contract negotiations. Even if the employer has access to past history or records of the job applicant's salary, that information may not be used to determine salary or compensation amounts.
An employer may only use salary history as part of the hiring and contract negotiation process only if a job applicant voluntarily and without prompting discloses his or her salary history.
Employers can face penalties of up to $250,000 for willfully violating the law and can award compensatory damages to victims.
Although the law does not officially take effect until November, it is recommended that employers begin an audit of their hiring process and review job applications and interview questions now to ensure that any potential violations can be fixed in time.
For additional details, visit the NYC website.