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Hiring a Freelancer May Require a Written
Agreement and 30 Day Payment
If you or your business hires a freelancer or an independent contractor to perform services, such as office cleaning or website design, you may fall under New York City's new law designed to protect freelance workers in the ever-popular "gig economy."
The new law, the "Freelance Isn't Free Act," ("the Act") was passed by the City Council on October 27, 2016 and should take effect in May 2017, pending the Mayor's signature. Full text of the Act can be found here.
The Act requires that a freelancer (anyone working on their own) and a hiring party put any working arrangement in writing if the agreement is for more than $800 over 120 days. Furthermore, regardless of whether a written agreement is required, hiring parties must pay freelancers within 30 days of completion of the services. Organizations that have longer pay cycles will have to ensure that they can make special provisions to accommodate freelancers under the new law.
In addition, the Act specifically prohibits hiring parties from trying to renegotiate rates with freelancers once they have started working.
If a hiring party runs afoul of the Act, a freelancer can file a complaint with the Office of Labor Standards, which will contact the hiring party and demand an explanation. If the hiring party still does not pay the freelancer, the freelancer can sue the hiring party in court and win attorney's fees and costs in addition to damages. Repeat offenders can be sued by New York City's corporation counsel.
The Act excludes lawyers, doctors, and sales representatives from being categorized as freelancers. This means that businesses can continue to transact with these professionals without a written agreement, and they are not required to pay such freelancers within thirty days. We caution business owners with respect to sales representatives that there are other legal reasons to have a written agreement, and having a written agreement with all freelancers is best practice regardless of whether an agreement is required by the Act. Moreover, attorneys are required to have a written retainer agreement with clients if the fee for the assignment is in excess of $3,000.
If you have any questions or need our assistance with drafting a standard form agreement please contact Lianne Forman at [email protected] or Peter Graham at [email protected].
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2017 Forecast - Will We See Changes in New York's Non-Compete Law?
Following on the heels of the White House release of its "State Call to Action on Non-Compete Agreements," encouraging states to adopt best practice policies in the enforcement of non-compete agreements, New York State's Attorney General announced that he plans to introduce legislation in 2017 to curb the use of these agreements. According to Attorney General Eric T. Schneiderman's October 25 press release, the new bill promises to "curb the rampant misuse of non-compete agreements, which depress wages and limit economic mobility by banning workers from employment at a competitor for a mandated period after leaving a job." Currently, New York does not have any statutes regarding the use of restrictive covenants, so agreements are only subject to review by courts. Thus, prior judicial decisions that apply a multi-factored, fact-specific balancing test under New York law are all that a lawyer can refer to when guiding clients on these issues.
According to the press release, the New York bill, which would be "the most comprehensive proposal yet to protect workers," will impose the following obligations:
- The bill will prohibit employers from using non-compete agreements for low-wage workers, in particular, those who earn less than the administrative and executive exemption salary thresholds.
- The legislation would require employers to provide prospective employees with non-compete agreements before extending a job offer.
- The bill would require employers to pay employees additional compensation if they sign non-compete agreements.
If passed, the law will restrict employers' use of non-compete agreements that are broader than are necessary to protect the employer's trade secrets or confidential information, and the proposal also limits the length of time of an enforceable non-compete provision.
The bill would allow for private lawsuits with remedies that employees can pursue when they are subjected to unlawful non-compete agreements. In addition, the proposal includes a "first-of-its-kind provision granting employees the right to seek liquidated damages."
A draft of the legislation is not yet available.
If you have questions regarding the use of non-compete agreements or similar restrictive covenants, please contact Chaim Book at [email protected] or Todd Parker at [email protected].
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With a new president and administration starting in January who have promised changes in immigration enforcement, there may be multiple changes on the immigration front in the months ahead. One change that is already in place that should not be overlooked is the new I-9 Form. The new form can be found at https://www.uscis.gov/sites/default/files/files/form/i-9.pdf
The United States Citizenship and Immigration Service (USCIS) has published the long awaited new Form I-9, Employment Eligibility Verification. The prior form expired on March 31, 2016. The Immigration and Nationality Act requires that employers complete a Form I-9 for all new hires after November 6, 1986, to verify employment authorization.
The new form, released on November 14, 2016, must be used beginning no later than January 22, 2017. Until then, the prior form remains acceptable.
The new form, which has many of the same features as the prior version, contains the following updates:
- Employers will be able to access and fill out the form on the USCIS website;
- There is a designated space for employers to note additional information regarding the unusual situations;
- The instructions are separate from the form;
- Embedded instructions pop up when the cursor hovers over a particular field; and,
- The new electronic version features new drop down menus and added security.
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LATE BREAKING NEWS REGARDING NEW
OVERTIME LAW
Last week, a efederal judge blocked an Obama administration rule to extend mandatory overtime pay to more than 4 million workers from taking ffect, imperiling one of the outgoing president's signature achievements for boosting wages.
U.S. District Judge Amos Mazzant in Sherman, Texas, agreed with 21 states and a coalition of business groups, including the U.S. Chamber of Commerce,that the rule is unlawful and granted their motion for a nationwide injunction. It was to take effect Dec. 1.
The rule would doubled to $47,500 thehave maximum salary a worker can earn and still be eligible for mandatory overtime pay.
Stay tuned in the coming weeks and we will informekeep you d as developments arise.
All of us at M&B would like to wish each and every one of you a joyous holiday season!
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