The Freelance Isn’t Free Act (FIFA): A Game-Changer for Businesses and Freelancers
As of today, businesses engaging independent contractors in New York are subject to the Freelance Isn’t Free Act (FIFA), which imposes significant new requirements. If your business hires freelancers for projects totaling $800 or more—whether as a single project or cumulatively over 120 days—you need to be aware of these changes.
Key Requirements Under FIFA:
Written Contracts: Any freelance engagement meeting the $800 threshold must be formalized with a written contract. This contract should clearly outline the scope of work, the rate of pay, and the payment due date.
Payment Deadlines: Payment must be made no later than 30 days after the completion of the work. Failure to adhere to this deadline can trigger severe penalties.
Enforcement and Penalties: If a freelancer files a complaint for non-compliance, the New York Attorney General has the authority to pursue penalties including fines up to $25,000, injunctive relief, and more. This is a significant risk for businesses that may not fully understand or comply with the law.
Why This Matters Beyond New York:
While FIFA is currently specific to New York, similar legislation could be adopted by other states. As more freelancers demand better protections, businesses operating across state lines might soon face similar regulations elsewhere. By proactively adopting FIFA's practices now, you can ensure your business is prepared for any future changes.
What Should You Do Next?
To ensure compliance with FIFA, review your current practices for engaging freelancers. Make sure that all contracts are in writing and meet the law’s requirements. If you’re unsure about where to start, contact your legal team. Staying ahead of legal changes is crucial for protecting your business.
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