Bill Text: NY S08369 | 2021-2022 | General Assembly | Introduced
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Bill Title: Enacts the "freelance isn't free act"; provides for the payment of freelance workers as independent contractors, including requiring written contracts; timely payment of compensation and handling controversies relating to payment, complaint procedures, and penalties; excludes construction contracts.
Spectrum: Partisan Bill (Democrat 14-0)
Status: (Vetoed) 2022-12-23 - VETOED MEMO.170 [S08369 Detail]
Download: New_York-2021-S08369-Introduced.html
Bill Title: Enacts the "freelance isn't free act"; provides for the payment of freelance workers as independent contractors, including requiring written contracts; timely payment of compensation and handling controversies relating to payment, complaint procedures, and penalties; excludes construction contracts.
Spectrum: Partisan Bill (Democrat 14-0)
Status: (Vetoed) 2022-12-23 - VETOED MEMO.170 [S08369 Detail]
Download: New_York-2021-S08369-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 8369 IN SENATE February 17, 2022 ___________ Introduced by Sen. GOUNARDES -- 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. Section 190 of the labor law is amended by adding four new subdi- 4 visions 10, 11, 12 and 13 to read as follows: 5 10. "Construction contractor" means any person, sole proprietor, part- 6 nership, firm, corporation, limited liability company, association or 7 other legal entity who by oneself or through others offers to undertake, 8 or holds oneself out as being able to undertake, or does undertake a 9 construction project. 10 11. "Construction project" means the providing of any labor or 11 services, and the use of any materials or equipment in order to alter, 12 build, excavate, add to, subtract from, improve, repair, maintain, reno- 13 vate, move, wreck or demolish any bridge, building, highway, road, rail- 14 road, land, tunnel, sewer, drainage or other structure, project, devel- 15 opment, or improvement, or the doing of any part thereof, including the 16 erection of scaffolding or other structures or works in connection ther- 17 ewith. 18 12. "Freelance worker" means any natural person or organization 19 composed of no more than one natural person, whether or not incorporated 20 or employing a trade name, that is hired or retained as an independent 21 contractor by a hiring party to provide services in exchange for an 22 amount equal to or greater than two hundred fifty dollars, either by 23 itself or when aggregated with all contracts for services between the 24 same hiring party and freelance worker during the immediately preceding 25 one hundred twenty days, but does not include: 26 a. any person who, pursuant to the contract at issue, is a sales 27 representative as defined in section one hundred ninety-one-a of this 28 article; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD13843-08-2S. 8369 2 1 b. any person engaged in the practice of law pursuant to the contract 2 at issue and who is a member in good standing of the bar of the highest 3 court of any state, possession, territory, commonwealth or the District 4 of Columbia and who is not under any order of court suspending, enjoin- 5 ing, restraining, disbarring or otherwise restricting such person in the 6 practices of law; 7 c. any person who is a licensed medical professional; or 8 d. any person who is a construction contractor. 9 13. "Hiring party" means any person who retains a freelance worker to 10 provide any service, other than: 11 a. the United States government; 12 b. the state of New York, including any office, department, agency, 13 authority or other body of the state including the legislature and the 14 judiciary; 15 c. a municipality, including any office, department, agency or other 16 body of a municipality; or 17 d. any foreign government. 18 § 3. Section 191 of the labor law is amended by adding a new subdivi- 19 sion 4 to read as follows: 20 4. a. Except as otherwise provided by law, the contracted compensation 21 shall be paid to the freelance worker either: 22 (i) on or before the date such compensation is due under the terms of 23 the contract; or 24 (ii) if the contract does not specify when the hiring party must pay 25 the contracted compensation or the mechanism by which such date will be 26 determined, no later than thirty days after the completion of the free- 27 lance worker's services under the contract. 28 b. Once a freelance worker has commenced performance of the services 29 under the contract, the hiring party shall not require as a condition of 30 timely payment that the freelance worker accept less compensation than 31 the amount of the contracted compensation. 32 § 4. Section 195 of the labor law is amended by adding a new subdivi- 33 sion 7 to read as follows: 34 7. (a) Whenever a hiring party retains the services of a freelance 35 worker, as such terms are defined in section one hundred ninety of this 36 article, the contract between such party and worker shall be reduced to 37 writing. The hiring party must furnish a copy of such written contract, 38 either physically or electronically, to the freelance worker and each 39 party to the written contract shall retain a copy thereof. 40 (b) The written contract shall include, at a minimum, the following 41 information: 42 (i) the name and mailing address of both the hiring party and the 43 freelance worker; 44 (ii) an itemization of all services to be provided by the freelance 45 worker, the value of the services to be provided pursuant to the 46 contract, and the rate and method of compensation; 47 (iii) the date on which the hiring party must pay the contracted 48 compensation or the mechanism by which such date will be determined; and 49 (iv) the date by which a freelance worker must submit a list of 50 services rendered under such contract to the hiring party in order to 51 meet any internal processing deadlines of such hiring party for the 52 purposes of compensation being timely rendered by the agreed-upon date 53 as stipulated in subparagraph (iii) of this paragraph. 54 (c) The commissioner may by rule require additional terms to ensure 55 that the freelance worker and the hiring party understand their obli- 56 gations under the contract.S. 8369 3 1 (d) Such hiring party shall be required to keep such contract for a 2 period of no less than six years and shall make such contract available 3 to the commissioner upon request. The failure of a hiring party to 4 produce such contract, upon request of the commissioner, shall give rise 5 to a presumption that the terms that the freelance worker has presented 6 are the agreed upon terms. 7 § 5. Subdivision 1 of section 196 of the labor law is amended by 8 adding a new paragraph f to read as follows: 9 f. The commissioner shall have the same duties, powers, and authority 10 described in this section for freelance workers and hiring parties, as 11 defined in section one hundred ninety of this article. In the event that 12 the commissioner shall sue a hiring party for wages due a freelance 13 worker, pursuant to paragraph b of this subdivision, he or she shall 14 provide such freelance worker with a written description of the antic- 15 ipated processing of such claim, including investigation, case confer- 16 ence, potential civil and criminal penalties, and collection procedures. 17 Each freelance worker and his or her authorized representative shall be 18 notified in writing of any case conference before it is held and given 19 the opportunity to attend. Each freelance worker and his or her author- 20 ized representative shall also be notified in writing of any award and 21 collection of back wages and civil penalties, and of any intent to seek 22 criminal penalties. In the event that criminal penalties are sought the 23 freelance worker and his or her authorized representative shall be noti- 24 fied of the outcome of prosecution. 25 § 6. Subdivision 2 of section 196 of the labor law, as amended by 26 chapter 564 of the laws of 2010, is amended to read as follows: 27 2. Nothing in this section shall be construed as requiring the commis- 28 sioner in every instance to investigate and attempt to adjust controver- 29 sies, or to take assignments of wage claims, or to institute criminal 30 prosecutions for any violation under this article or article five, 31 seven, nineteen or nineteen-A of this chapter, but he or she shall be 32 deemed vested with discretion in such matters. This subdivision shall 33 not apply, however, to freelance workers filing a complaint pursuant to 34 section one hundred ninety-six-a of this article, in which case the 35 commissioner shall be required to investigate such complaint pursuant to 36 such section. 37 § 7. Section 196-a of the labor law is amended by adding a new subdi- 38 vision (c) to read as follows: 39 (c)(i) A freelance worker who is aggrieved by a violation of this 40 article may file a complaint with the commissioner within two years 41 after the acts alleged to have violated this article occurred. The 42 commissioner shall prescribe the form of the complaint, which shall 43 include, at a minimum: 44 (A) the name and mailing address of the freelance worker and of the 45 hiring party alleged to have violated this article; 46 (B) a statement detailing the terms of the freelance contract, includ- 47 ing a copy of such contract if available; 48 (C) the freelance worker's occupation; 49 (D) a statement detailing the alleged violations of this article; and 50 (E) a signed affirmation that all facts alleged in the complaint are 51 true. 52 (ii) At the time the commissioner receives a complaint alleging a 53 violation of this article, the commissioner shall refer the freelance 54 worker to the navigation program identified in subdivision two of 55 section one hundred ninety-nine-b of this article.S. 8369 4 1 (iii) Within twenty days of receiving a complaint alleging a violation 2 of this article, the commissioner shall send the hiring party named in 3 the complaint a written notice of complaint. Such notice shall inform 4 the hiring party that a complaint has been filed alleging violations of 5 this article, detail the remedies available to a freelance worker for 6 violations of this article by a hiring party, and include a copy of the 7 complaint and notice that failure to respond to the complaint creates a 8 rebuttable presumption in any civil action commenced pursuant to this 9 article that the hiring party committed the violations alleged in the 10 complaint. The commissioner shall send such notice by certified mail and 11 shall bear the cost of sending such notice. 12 (iv) (A) Within twenty days of receiving the notice of complaint, the 13 hiring party identified in the complaint shall send the commissioner one 14 of the following: 15 (1) a written statement that the freelance worker has been paid in 16 full and proof of such payment; or 17 (2) a written statement that the freelance worker has not been paid in 18 full and the reasons for the failure to provide such payment. 19 (B) Within twenty days of receiving the written response, the commis- 20 sioner shall send the freelance worker a copy of: 21 (1) the response; 22 (2) any enclosures submitted to the commissioner with the response; 23 (3) materials informing the freelance worker that he or she may bring 24 an action in a court of competent jurisdiction; 25 (4) any other information about the status of the complaint; and 26 (5) information about the navigation program described in subdivision 27 two of section one hundred ninety-nine-b of this article. 28 (C) If the commissioner receives no response to the notice of 29 complaint within the time provided by this subdivision, the commissioner 30 shall mail a notice of non-response to both the freelance worker and the 31 hiring party by regular mail and shall include with such notice proof 32 that the commissioner previously mailed the notice of complaint to the 33 hiring party by certified mail. Upon satisfying the requirements of this 34 paragraph, the commissioner may close the case. 35 § 8. Section 198 of the labor law is amended by adding a new subdivi- 36 sion 5 to read as follows: 37 5.(a) (i) A freelance worker alleging a violation of this article may 38 bring an action in any court of competent jurisdiction for damages. 39 (ii) Any action alleging a violation of subdivision seven of section 40 one hundred ninety-five of this article shall be brought within two 41 years after the acts alleged to have violated this article occurred. 42 (iii) Any action alleging a violation of subdivision four of section 43 one hundred ninety-one or subdivision one of section one hundred nine- 44 ty-nine-b of this article shall be brought within six years after the 45 acts alleged to have violated this article occurred. 46 (iv) Within ten days after having commenced a civil action pursuant to 47 this subdivision, a plaintiff shall serve a copy of the complaint upon 48 an authorized representative of the commissioner. Failure to so serve a 49 complaint does not adversely affect any plaintiff's cause of action. 50 (v) A plaintiff who solely alleges a violation of subdivision seven of 51 section one hundred ninety-five of this article must prove that such 52 plaintiff requested a written contract before the contracted work began. 53 (b) (i) A plaintiff who prevails on a claim alleging a violation of 54 this article shall be awarded damages as described in this subdivision 55 and an award of reasonable attorneys' fees and costs.S. 8369 5 1 (ii) (A) A plaintiff who prevails on a claim alleging a violation of 2 subdivision seven of section one hundred ninety-five of this article 3 shall be awarded statutory damages of two hundred fifty dollars. 4 (B) A plaintiff who prevails on a claim alleging a violation of subdi- 5 vision seven of section one hundred ninety-five of this article and on 6 one or more claims under other provisions of this article shall be 7 awarded statutory damages equal to the value of the underlying contract 8 for the violation of such subdivision seven in addition to the remedies 9 specified in this article for such other violations. 10 (iii) In addition to other damages awarded pursuant to this article, a 11 plaintiff who prevails on a claim alleging a violation of subdivision 12 four of section one hundred ninety-one of this article is entitled to an 13 award of double damages, injunctive relief, and other such remedies as 14 may be appropriate. 15 (iv) In addition to any other damages awarded pursuant to this arti- 16 cle, a plaintiff who prevails on a claim alleging a violation of subdi- 17 vision one of section one hundred ninety-nine-b of this article is enti- 18 tled to statutory damages equal to the value of the underlying contract 19 for each violation arising under such subdivision. 20 § 9. The labor law is amended by adding a new section 199-b to read as 21 follows: 22 § 199-b. Additional powers and responsibilities relating to freelance 23 workers. 1. Retaliation. No hiring party, as defined in section one 24 hundred ninety of this article, shall threaten, intimidate, discipline, 25 harass, deny a work opportunity to, or discriminate against a freelance 26 worker, or take any other action that penalizes a freelance worker for, 27 or is reasonably likely to deter a freelance worker from, exercising or 28 attempting to exercise any right guaranteed under this article, or from 29 obtaining any future work opportunity because the freelance worker has 30 done so. 31 2. Navigation program. (a) The commissioner shall establish a naviga- 32 tion program that provides information and assistance, as set forth in 33 subdivision (c) of section one hundred ninety-six-a of this article, 34 relating to the provisions of this article. Such program shall include 35 assistance by a natural person by phone and e-mail and shall also 36 include online information. 37 (b) The commissioner shall make available model contracts on the 38 website of the department for use by the general public at no cost. 39 Such model contracts shall be made available in English and in the 40 twelve languages most commonly spoken by limited English proficient 41 individuals in the state. 42 (c) The navigation program shall provide the following: 43 (i) general court information and information about procedures under 44 this article; 45 (ii) information about available templates and relevant court forms; 46 (iii) general information about classifying persons as employees or 47 independent contractors; 48 (iv) information about obtaining translation and interpretation 49 services and other courtroom services; 50 (v) a list of organizations that can be used for the identification of 51 attorneys; and 52 (vi) other information, as determined by the commissioner, related to 53 the submission of a complaint by a freelance worker or the commencement 54 of a civil action pursuant to this article by a freelance worker. 55 (d) The navigation program shall include outreach and education to the 56 public on the provisions of this article.S. 8369 6 1 (e) The navigation program shall not provide legal advice. 2 3. Civil action for pattern or practice of violations. (a)(i) Where 3 reasonable cause exists to believe that a hiring party is engaged in a 4 pattern or practice of violations of this article, the attorney general 5 may commence a civil action on behalf of the state in a court of compe- 6 tent jurisdiction. 7 (ii) An action pursuant to subparagraph (i) of this paragraph shall be 8 commenced by filing a complaint setting forth facts relating to such 9 pattern or practice and requesting relief, which may include injunctive 10 relief, civil penalties, and any other appropriate relief. 11 (iii) Nothing in this paragraph prohibits: 12 (A) a person alleging a violation of this article from filing a civil 13 action pursuant to section one hundred ninety-eight of this article 14 based on the same facts as a civil action commenced by the attorney 15 general pursuant to this section; or 16 (B) the commissioner from sending a notice of complaint pursuant to 17 section one hundred ninety-six-a of this article, unless otherwise 18 barred from doing so. 19 (b) In any civil action commenced pursuant to paragraph (a) of this 20 subdivision, the trier of fact may impose a civil penalty of not more 21 than twenty-five thousand dollars for a finding that a hiring party has 22 engaged in a pattern or practice of violations of this article. Any 23 civil penalty so recovered shall be paid into the general fund. 24 4. Application; waiver; effect on other laws. (a) Except as otherwise 25 provided by law, any provision of a contract purporting to waive rights 26 under this article is void as against public policy. 27 (b) The provisions of this article supplement, and do not diminish or 28 replace, any other basis of liability or requirement established by 29 statute or common law. 30 (c) Failure to comply with the provisions of this article does not 31 render any contract between a hiring party and a freelance worker void 32 or voidable or otherwise impair any obligation, claim or right related 33 to such contract or constitute a defense to any action or proceeding to 34 enforce, or for breach of, such contract. 35 (d) No provision of this article relating to freelance workers shall 36 be construed as providing a determination about the legal classification 37 of any such worker as an employee or independent contractor. 38 5. Data collection and reporting. (a) No later than six months after 39 the commissioner sends to a freelance worker either a hiring party's 40 response and accompanying materials or a notice of non-response pursuant 41 to section one hundred ninety-six-a of this article, the commissioner 42 shall send the freelance worker a survey requesting additional informa- 43 tion about the resolution of the freelance worker's claims. Such survey 44 shall ask whether or not the freelance worker pursued any such claims in 45 court or through an alternative dispute resolution process and whether 46 or not the hiring party ultimately paid any or all of the compensation 47 the freelance worker alleged was due or if the matter was resolved in a 48 different manner. Such survey shall state clearly that response to the 49 survey is voluntary. 50 (b) The commissioner shall collect and track information about 51 complaints alleging violations of this article. The information 52 collected shall include, at minimum: 53 (i) the identity of the hiring party alleged to have violated this 54 chapter; 55 (ii) the freelance worker's occupation;S. 8369 7 1 (iii) the section of this article that was alleged to have been 2 violated; 3 (iv) the value of the contract; 4 (v) the response or non-response from the hiring party; and 5 (vi) information from a completed survey identified in paragraph (a) 6 of this subdivision. 7 (c) One year after the effective date of this section, and every fifth 8 year thereafter by November first, the commissioner shall submit to the 9 legislature and publish on its website a report regarding the effective- 10 ness of the applicable provisions of this article at improving freelance 11 contracting and payment practices. Such report shall include, at a 12 minimum: 13 (i) the number of complaints the commissioner has received pursuant to 14 such provisions; 15 (ii) the value of the contracts disaggregated into ranges of five 16 hundred dollars and by section of this article alleged to have been 17 violated; 18 (iii) the numbers of responses and non-responses received by the 19 commissioner disaggregated by contract value into ranges of five hundred 20 dollars and by section of this article alleged to have been violated; 21 (iv) the proportion of surveys received from freelance workers that 22 indicate that they pursued their claims in court and the proportion of 23 surveys received from freelance workers that indicate that they pursued 24 their claims through an alternative dispute resolution process and a 25 summary of the outcomes of such cases; and 26 (v) legislative recommendations, including consideration of whether 27 certain occupations should be exempted from the scope of the definition 28 of freelance worker in section one hundred ninety of this article. 29 § 10. The provisions of this act shall not be construed or interpreted 30 to override or supplant any of the provisions of chapter 10 of title 20 31 of the administrative code of the city of New York. 32 § 11. This act shall take effect on the one hundred eightieth day 33 after it shall have become a law and shall apply only to contracts 34 entered into on or after such effective date. Effective immediately, the 35 addition, amendment and/or repeal of any rules or regulations necessary 36 for the implementation of this act on its effective date are authorized 37 to be made on or before such effective date.
