Freelancers find they are often overlooked when it comes to getting paid on time. Unfortunately, there is little to no legal recourse to prevent this from happening. One city made some changes to help ensure their freelancers, about one third of the overall workforce, would get paid or at least have something they can do about it. As New York City is the first to pass a "Freelance isn't free" law, more communities are taking note.
Here's how to help take "Freelance isn't free" nationwide.
The "Gig Economy"
Technology, the economy, and changes in government administration have affected the American workforce. No longer do the majority of employees stay at the same jobs their entire adult lives and expect a pension at retirement. Automation of jobs in manufacturing lead to a decrease in traditional jobs, leaving a generation of workers wondering how to find work. The internet has drastically affected the way people and businesses relate to each other. As student debt and the cost of college increases, a younger generation is creatively searching for career options. Combined, these changes have helped exacerbate the growth of a freelance or contractor workforce.
Freelance Workforce Statistics
In October 2016, Freelancers Union, in combination with Upwork, released a comprehensive study on the independent workforce called Freelancing in America. The study offers analysis of the freelance workforce and insights into the daily lives of those who work this way.
The study showed an increase, year over year, of independent contractors since 2014. Other statistics include:
- Over $1 trillion was contributed to the U.S. economy by freelancers
- 55 million are freelancing (35% of the U.S. workforce).
- 63% of freelancers are independents by choice
So why are these numbers increasing every day? Just take a look at the data provided by the folks at Hubstaff: "It's a Frellance World: Why Contract Work is Becoming the Norm". It won't take long to figure out the appeal of contract work.
Yet with so many independent contractors working in the United States today, it is difficult to believe that there are no laws to protect the freelancer from not getting paid by a client.
Freelance Isn't Free
In 2015, Freelancers Union reported that nearly three quarters of independents in New York City faced challenges in receiving payment. Signed in 2016 and in effect in May 2017, New York City became the first in the nation to establish a labor law for freelancer rights. The Freelance Isn't Free law guarantees:
- Employers must pay freelancers in full before, on time, or within 30 days after completion of services. Employers are also prohibited from asking the freelancer to accept less than the agreed amount.
- Freelancers will be able sue employers for what they're owed if they do not pay on time, including penalties, court costs, and attorney fees.
- Employers are required to produce a written contract to the contractor if the payments will be more than $800.
- The law also protects freelancers from retaliation by employers, including threats, harassment, intimidation tactics, or any other action that would prohibit the worker from pursuing their rights under the new law.
Freelance Payment Rights Elsewhere
Freelancers have no rights to payments other than debt collections or suing for breach of contract, making the NYC law the first in steps to adjust labor laws to reflect America's new way of working. When pursuing debt collections, contractors may not pay a fee up front but the collection agency will take a percentage as a fee if they are able to collect. When a freelancer has to take legal action, they must take time away from other clients and other ways they're earning a living. They also must be responsible for attorney fees and court costs, increasing the financial burden on workers who may already be behind on bills.
New York City took a stand, just as other workers have done in the past, and ensured their 4 million freelance workers had pay protections. What can freelancers do to gain similar protections? Start at the local level, communities and city councils, and educate them on how New York is a step ahead. For resources to share, or ideas on how to get involved, consider the links below:
- Freelancing in America report for 2016
- Sign a petition to bring Freelance Isn't Free in your city
- Join Freelancers Union, Donate or get involved in your local Freelance Community