What You Need to Know
California has taken a significant step to protect freelance workers with the passage of Senate Bill No. 988, also known as the Freelance Worker Protection Act. set to take effect on January 1, 2025, this new legislation establishes minimum requirements for freelance contracts, payment schedules, and protections against discrimination.
Key Provisions of the Freelance Worker Protection Act
- Written Contracts
Hiring parties will now be required to provide a written contract for freelance work. The contract must detail the services, compensation, payment terms, and deadlines, ensuring both parties are on the same page from the start. Freelancers must receive a signed copy, and the hiring party must retain the contract for at least four years.
- Timely Payment
The Act mandates that hiring parties pay freelancers by the contract’s specified due date, or within 30 days of completing the work if no date is given. Freelancers cannot be required to accept less payment or perform additional services beyond what was agreed upon.
- Protection from Retaliation
Hiring parties are prohibited from discriminating against or retaliating against freelancers who assert their rights under the Act, including opposing unfair practices or seeking enforcement of the contract.
- Enforcement and Legal Remedies
Freelancers have the right to take legal action if their rights under the Act are violated. They may be entitled to damages, attorney’s fees, and other remedies, including up to twice the amount of unpaid compensation if payments are delayed.
- Applies Starting January 1, 2025
The law applies to contracts entered into or renewed after January 1, 2025, ensuring that future freelance agreements comply with these protections.
This act applies to the following categories of service by Independent Contractors.
- Marketing
- Administrator of Human Resources
- Travel Agent Services
- Services provided by an enrolled agent who is licensed by the United States Department of the Treasury to practice before the Internal Revenue Service.
- Payment processing agent through an independent sales organization.
- A still photographer, photojournalist, videographer, or photo editor who works under a written contract that specifies the rate of pay and obligation to pay by a defined time.
- Services provided by an individual as a content contributor, advisor, producer, narrator, or cartographer for a journal, book, periodical, evaluation, other publication or educational, academic, or instructional work.
- Services provided by a licensed esthetician, licensed electrologist, licensed manicurist, licensed barber, or licensed cosmetologist.
- A specialized performer hired by a performing arts company or organization to teach a master class for no more than once a week.
- Services provided by an appraiser.
Why It Matters
The Freelance Worker Protection Act aims to provide more stability and fairness to California’s freelance workforce. It holds hiring parties accountable for timely payments and clear agreements while offering freelancers the legal tools to protect their rights. This landmark legislation is a significant development for the gig economy, ensuring that freelancers are treated fairly and compensated promptly for their work.