STATE OF NEW YORK ________________________________________________________________________ 5026 2023-2024 Regular Sessions IN SENATE February 22, 2023 ___________ Introduced by Sens. GOUNARDES, BROUK, CLEARE, HOYLMAN-SIGAL, JACKSON, KRUEGER, MYRIE, RAMOS, RIVERA, RYAN, SALAZAR, SEPULVEDA, SKOUFIS -- read twice and ordered printed, and when printed to be committed to the Committee on Labor AN ACT to amend the labor law, in relation to enacting the "freelance isn't free act" The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "freelance isn't free act". 3 § 2. The labor law is amended by adding a new section 191-d to read as 4 follows: 5 § 191-d. Payment of wages for freelance workers. 1. (a) "Construction 6 contractor" means any person, sole proprietor, partnership, firm, 7 corporation, limited liability company, association or other legal 8 entity who by oneself or through others offers to undertake, or holds 9 oneself out as being able to undertake, or does undertake a 10 construction project. 11 (b) "Construction project" means the providing of any labor or 12 services, and the use of any materials or equipment in order to alter, 13 build, excavate, add to, subtract from, improve, repair, maintain, reno- 14 vate, move, wreck or demolish any bridge, building, highway, road, rail- 15 road, land, tunnel, sewer, drainage or other structure, project, devel- 16 opment, or improvement, or the doing of any part thereof, including the 17 erection of scaffolding or other structures or works in connection ther- 18 ewith. 19 (c) "Freelance worker" means any natural person or organization 20 composed of no more than one natural person, whether or not incorporated 21 or employing a trade name, that is hired or retained as an independent 22 contractor by a hiring party to provide services in exchange for an 23 amount equal to or greater than eight hundred dollars, either by itself EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD04464-01-3S. 5026 2 1 or when aggregated with all contracts for services between the same 2 hiring party and freelance worker during the immediately preceding one 3 hundred twenty days, but does not include: 4 (i) any person who, pursuant to the contract at issue, is a sales 5 representative as defined in section one hundred ninety-one-a of this 6 article; 7 (ii) any person engaged in the practice of law pursuant to the 8 contract at issue and who is a member in good standing of the bar of the 9 highest court of any state, possession, territory, commonwealth or the 10 District of Columbia and who is not under any order of court suspending, 11 enjoining, restraining, disbarring or otherwise restricting such person 12 in the practices of law; 13 (iii) any person who is a licensed medical professional; or 14 (iv) any person who is a construction contractor. 15 (d) "Hiring party" means any person who retains a freelance worker to 16 provide any service, other than: 17 (i) the United States government; 18 (ii) the state of New York, including any office, department, agency, 19 authority or other body of the state including the legislature and the 20 judiciary; 21 (iii) a municipality, including any office, department, agency or 22 other body of a municipality; or 23 (iv) any foreign government. 24 2. (a) Except as otherwise provided by law, the contracted compen- 25 sation shall be paid to a freelance worker either: 26 (i) on or before the date such compensation is due under the terms of 27 the contract; or 28 (ii) if the contract does not specify when the hiring party must pay 29 the contracted compensation or the mechanism by which such date will be 30 determined, no later than thirty days after the completion of the free- 31 lance worker's services under the contract. 32 (b) Once a freelance worker has commenced performance of the services 33 under the contract, the hiring party shall not require as a condition of 34 timely payment that the freelance worker accept less compensation than 35 the amount of the contracted compensation. 36 3. (a) Whenever a hiring party retains the services of a freelance 37 worker, as such terms are defined in this section, the contract between 38 such party and worker shall be reduced to writing. The hiring party must 39 furnish a copy of such written contract, either physically or electron- 40 ically, to the freelance worker and each party to the written contract 41 shall retain a copy thereof. 42 (b) The written contract shall include, at a minimum, the following 43 information: 44 (i) the name and mailing address of both the hiring party and the 45 freelance worker; 46 (ii) an itemization of all services to be provided by the freelance 47 worker, the value of the services to be provided pursuant to the 48 contract, and the rate and method of compensation; 49 (iii) the date on which the hiring party must pay the contracted 50 compensation or the mechanism by which such date will be determined; and 51 (iv) the date by which a freelance worker must submit a list of 52 services rendered under such contract to the hiring party in order to 53 meet any internal processing deadlines of such hiring party for the 54 purposes of compensation being timely rendered by the agreed-upon date 55 as stipulated in subparagraph (iii) of this paragraph.S. 5026 3 1 (c) The commissioner may by rule require additional terms to ensure 2 that the freelance worker and the hiring party understand their obli- 3 gations under the contract. 4 (d) Such hiring party shall be required to keep such contract for a 5 period of no less than six years and shall make such contract available 6 to the commissioner upon request. The failure of a hiring party to 7 produce such contract, upon request of the commissioner, shall give rise 8 to a presumption that the terms that the freelance worker has presented 9 are the agreed upon terms. 10 3-a. The commissioner shall make available model contracts on the 11 website of the department for use by the general public at no cost. Such 12 model contracts shall be made available in English and in the twelve 13 languages most commonly spoken by limited English proficient individuals 14 in the state. 15 4. No hiring party, as defined in this section, shall threaten, 16 intimidate, discipline, harass, deny a work opportunity to, or discrimi- 17 nate against a freelance worker, or take any other action that penal- 18 izes a freelance worker for, or is reasonably likely to deter a free- 19 lance worker from, exercising or attempting to exercise any right 20 guaranteed under this article, or from obtaining any future work oppor- 21 tunity because the freelance worker has done so. 22 5. (a) Any freelance worker or his or her authorized representative 23 may file with the commissioner a complaint regarding a violation of this 24 article for an investigation of such complaint and statement setting the 25 appropriate remedy, if any. The commissioner shall keep the names of 26 freelance workers who are the subject of an investigation confidential 27 until such time that disclosure is necessary for resolution of an inves- 28 tigation or a complaint. Failure of a hiring party to keep adequate 29 records or provide a written contract as required under this section, in 30 addition to exposing such hiring party to penalties authorized under 31 this section, shall not operate as a bar to filing of a complaint by a 32 freelance worker. In such a case the hiring party in violation shall 33 bear the burden of proving that the complaining employee was paid in 34 accordance with this section. 35 (b) Each freelance worker who files a complaint regarding a violation 36 of this article or a rule or regulation promulgated thereunder, shall 37 be provided with a written description of the anticipated proc- 38 essing of the complaint, including investigation, case conference, 39 potential civil and criminal penalties, and collection procedures. 40 (i) Each freelance worker and his or her authorized representative 41 shall be notified in writing of any case conference before it is held 42 and given the opportunity to attend. 43 (ii) Each freelance worker and his or her authorized representative 44 shall be notified in writing of any award and collection of civil 45 penalties. 46 6. The commissioner shall have the following duties, powers and 47 authority: 48 (a) The commissioner shall investigate and attempt to adjust equitably 49 controversies between freelance workers and hiring parties relating to 50 this article. 51 (b) The commissioner may take assignments of claims for wages under 52 this article from freelance workers or third parties in trust for such 53 freelance workers or for the benefit of various funds for such freelance 54 workers. All such assignments shall run to the commissioner and his or 55 her successor in office. The commissioner may sue hiring parties on wage 56 claims thus assigned, with the benefits and subject to the provisions ofS. 5026 4 1 existing law applying to actions by freelance workers for collection of 2 wages. He or she may join in a single action any number of wage claims 3 against the same hiring party. 4 (c) (i) The commissioner is hereby authorized and empowered to enter 5 into reciprocal agreements with the labor department or corresponding 6 agency of any other state or with the person, board, officer, or commis- 7 sion authorized to act on behalf of such department or agency, for 8 the collection in such other states of claims and judgments for wages 9 based upon claims assigned to the commissioner. 10 (ii) The commissioner may, to the extent provided for by any recip- 11 rocal agreement entered into by law or with any agency of another state 12 as herein provided, maintain actions in the courts of such other state 13 for the collection of claims and judgments for wages and may assign such 14 claims and judgments to the labor department or agency of such other 15 state for collection to the extent that such an assignment may be 16 permitted or provided for by the law of such state or by reciprocal 17 agreement. 18 (iii) The commissioner may, upon the written consent of the labor 19 department or other corresponding agency of any other state or of 20 any person, board, officer, or commission of such state authorized to 21 act on behalf of such labor department or corresponding agency, 22 maintain actions in the courts of this state upon assigned claims and 23 judgments for wages arising in such other state in the same manner 24 and to the same extent that such actions by the commissioner are 25 authorized when arising in this state. However, such actions may be 26 maintained only in cases where such other state by law or reciprocal 27 agreement extends a like comity to cases arising in this state. 28 (d) Nothing in this section shall be construed as requiring 29 the commissioner in every instance to investigate and attempt to 30 adjust controversies, or to take assignments of wage claims, but he or 31 she shall be deemed vested with discretion in such matters. 32 7. (a) (i) A freelance worker alleging a violation of this article may 33 bring an action in any court of competent jurisdiction for damages. 34 (ii) Any action alleging a violation of subdivision three of this 35 section shall be brought within two years after the acts alleged to have 36 violated this article occurred. 37 (iii) Any action alleging a violation of subdivision two of this 38 section or subdivision four of this section shall be brought within six 39 years after the acts alleged to have violated this article occurred. 40 (iv) Within ten days after having commenced a civil action pursuant to 41 this subdivision, a plaintiff shall serve a copy of the complaint upon 42 an authorized representative of the commissioner. Failure to so serve a 43 complaint does not adversely affect any plaintiff's cause of action. 44 (v) A plaintiff who solely alleges a violation of subdivision three of 45 this section must prove that such plaintiff requested a written contract 46 before the contracted work began. 47 (b) (i) A plaintiff who prevails on a claim alleging a violation of 48 subdivision two of this section shall be awarded damages as described in 49 this subdivision and an award of reasonable attorneys' fees and costs. 50 (ii) (A) A plaintiff who prevails on a claim alleging a violation of 51 subdivision three of this section shall be awarded statutory damages of 52 two hundred fifty dollars. 53 (B) A plaintiff who prevails on a claim alleging a violation of this 54 section and on one or more claims under other provisions of this article 55 shall be awarded statutory damages equal to the value of the underlyingS. 5026 5 1 contract for the violation in addition to the remedies specified in this 2 article for such other violations. 3 (iii) In addition to other damages awarded pursuant to this article, a 4 plaintiff who prevails on a claim alleging a violation of subdivision 5 two of this section is entitled to an award of double damages, injunc- 6 tive relief, and other such remedies as may be appropriate. 7 (iv) In addition to any other damages awarded pursuant to this arti- 8 cle, a plaintiff who prevails on a claim alleging a violation of subdi- 9 vision four of this section is entitled to statutory damages equal to 10 the value of the underlying contract for each violation arising under 11 such subdivision. 12 8. (a)(i) Where reasonable cause exists to believe that a hiring party 13 is engaged in a pattern or practice of violations of this article, the 14 attorney general may commence a civil action on behalf of the state in a 15 court of competent jurisdiction. 16 (ii) An action pursuant to subparagraph (i) of this paragraph shall be 17 commenced by filing a complaint setting forth facts relating to such 18 pattern or practice and requesting relief, which may include injunctive 19 relief, civil penalties, and any other appropriate relief. 20 (iii) Nothing in this paragraph prohibits: 21 (A) a person alleging a violation of this article from filing a civil 22 action based on the same facts as a civil action commenced by the attor- 23 ney general pursuant to this section; or 24 (B) the commissioner from sending a notice of complaint, unless other- 25 wise barred from doing so. 26 (b) In any civil action commenced pursuant to this subdivision, the 27 trier of fact may impose a civil penalty of not more than twenty-five 28 thousand dollars for a finding that a hiring party has engaged in a 29 pattern or practice of violations of this article. Any civil penalty so 30 recovered shall be paid into the general fund. 31 9. (a) Except as otherwise provided by law, any provision of a 32 contract purporting to waive rights under this section is void as 33 against public policy. 34 (b) The provisions of this section supplement, and do not diminish or 35 replace, any other basis of liability or requirement established by 36 statute or common law. 37 (c) Failure to comply with the provisions of this section does not 38 render any contract between a hiring party and a freelance worker void 39 or voidable or otherwise impair any obligation, claim or right related 40 to such contract or constitute a defense to any action or proceeding to 41 enforce, or for breach of, such contract. 42 (d) No provision of this section relating to freelance workers shall 43 be construed as providing a determination about the legal classification 44 of any such worker as an employee or independent contractor. 45 10. The department shall conduct a public awareness outreach campaign, 46 which shall include making information available on its website, other- 47 wise informing hiring parties of the provisions of this section, and 48 establishing a means for assistance by a natural person through phone 49 and e-mail. 50 11. (a) No later than six months after the commissioner sends to a 51 freelance worker either a hiring party's response and accompanying mate- 52 rials or a notice of non-response pursuant to section one hundred nine- 53 ty-six-a of this article, the commissioner shall send the freelance 54 worker a survey requesting additional information about the resolution 55 of the freelance worker's claims. Such survey shall ask whether or not 56 the freelance worker pursued any such claims in court or through anS. 5026 6 1 alternative dispute resolution process and whether or not the hiring 2 party ultimately paid any or all of the compensation the freelance work- 3 er alleged was due or if the matter was resolved in a different manner. 4 Such survey shall state clearly that response to the survey is volun- 5 tary. 6 (b) The commissioner shall collect and track information about 7 complaints alleging violations of this article. The information 8 collected shall include, at minimum: 9 (i) the identity of the hiring party alleged to have violated this 10 article; 11 (ii) the freelance worker's occupation; 12 (iii) the section of this article that was alleged to have been 13 violated; 14 (iv) the value of the contract; 15 (v) the response or non-response from the hiring party; and 16 (vi) information from a completed survey identified in paragraph (a) 17 of this subdivision. 18 (c) One year after the effective date of this section, and every fifth 19 year thereafter by November first, the commissioner shall submit to the 20 legislature and publish on its website a report regarding the effective- 21 ness of the applicable provisions of this article at improving freelance 22 contracting and payment practices. Such report shall include, at a 23 minimum: 24 (i) the number of complaints the commissioner has received pursuant to 25 such provisions; 26 (ii) the value of the contracts disaggregated into ranges of five 27 hundred dollars and by section of this article alleged to have been 28 violated; 29 (iii) the numbers of responses and non-responses received by the 30 commissioner disaggregated by contract value into ranges of five hundred 31 dollars and by section of this article alleged to have been violated; 32 (iv) the proportion of surveys received from freelance workers that 33 indicate that they pursued their claims in court and the proportion of 34 surveys received from freelance workers that indicate that they pursued 35 their claims through an alternative dispute resolution process and a 36 summary of the outcomes of such cases; and 37 (v) legislative recommendations, including consideration of whether 38 certain occupations should be exempted from the scope of the definition 39 of freelance worker in this section. 40 § 3. The provisions of this act shall not be construed or interpreted 41 to override or supplant any of the provisions of chapter 10 of title 20 42 of the administrative code of the city of New York. 43 § 4. This act shall take effect on the one hundred eightieth day after 44 it shall have become a law and shall apply only to contracts entered 45 into on or after such effective date. Effective immediately, the addi- 46 tion, amendment and/or repeal of any rules or regulations necessary for 47 the implementation of this act on its effective date are authorized to 48 be made on or before such effective date.