Freelance Protections Were Just Signed Into Law Across California State: Here’s What You Need to Know

The Freelance Worker Protection Act, an iteration of “Freelance Isn’t Free”, was signed into law by Governor Gavin Newsom on September 28th, 2024. This legislation, which was authored by Senator Scott Wiener, provides protections for independent contractors who work for a hiring entity located in California. 

Though freelancing represents a crucial part of California’s economy, the prevalent issue of non-payment remains, reflecting a growing need to protect this vital workforce sector. In 2022, 60 million Americans freelanced, contributing $1.35 trillion to the national economy, with 71% reporting late or non-payment for their work. For those freelancers who operate paycheck to paycheck, the absence of reliable payment systems has long been a major issue.

California's Freelance Worker Protection Act directly addresses these concerns by requiring written contracts for freelance services valued at $250 or more. These contracts must outline the scope of work, payment method, deadlines, and other important details—ensuring transparency and fairness from the start. Here’s what you need to know about the law:

Key Definitions: 

• Hiring Party: a person or organization in the State of California that retains a freelance worker to provide professional services (excl federal, state, local, or foreign governments or individuals hiring services for the personal benefit of themselves, their family members, or their homestead).
• Freelance Worker: a person that is hired or retained as a bona fide independent contractor by a hiring party to provide professional services in exchange for $250 or more (aggregating all contracts between the same hiring party in 120 days).
• Professional services: has the same meaning as that provided under AB 5 and includes services such as marketing, human resources, travel agent services, graphic design, grant writing, fine artistry, photography, videography, photo editing, freelance writing, translating, editing, illustrating, and others.

Key Provisions of the Freelance Worker Protection Act:

• Written Contract Requirement: Freelancers must have a written agreement in place for work totaling $250 or more over a 120 day period. The contract must clearly outline the scope of services, deadlines, compensation rates, and payment methods.
• 30-Day Payment Terms: Freelancers are entitled to payment within 30 days of completing their work, unless the contract specifies otherwise. This provision eliminates the uncertainty many freelancers face when waiting for payment.
• Anti-Retaliation Protections: Freelancers are protected from any retaliation by hiring entities if they assert their right to fair payment under the law.
• Enforcement and Legal Remedies: If a client fails to pay, freelancers can seek legal recourse, including double damages and the recovery of attorney's fees. Both freelancers and public prosecutors can file claims to ensure compliance with the law.

What Does This Mean for California Freelancers?

Freelancers will soon be able to operate with greater security, knowing that they have legal protections for timely payments and written contracts. Much like freelancers in Illinois and New York, who have benefited from similar laws, California freelancers will now be able to enforce basic rights with more confidence.

Looking Ahead

Although the law doesn’t take effect until January 2025, freelancers and businesses alike should start preparing. Freelancers can begin using written contracts now to ensure compliance and set clear expectations with clients. Similarly, businesses that frequently hire independent contractors should familiarize themselves with the new requirements to avoid penalties or disputes down the line.

“The choice to freelance shouldn’t be a choice to be exploited by your employer,” said Senator Wiener, sponsor of the bill. “As freelancers become a greater and greater share of the labor market, it’s essential that we expand protections to ensure this career path is financially viable. This bill provides these long overdue protections, and I thank the Governor for championing the rights of working people.”

“Independent workers across all industries are drawn to California in pursuit of their dreams. Unfortunately, cases of non-payment by clients make these dreams harder to pursue,” said Rafael Espinal, Executive Director of the Freelancers Union. “I commend the author of this bill, Senator Wiener, for his support and dedication to this crucial workforce. This legislation will establish payment protections as the standard for all workers, providing a major victory for the millions of freelancers who play a significant role in boosting the state’s economy.”

California’s Freelance Worker Protection Act builds on the momentum of similar legislation nationwide. Since the adoption of New York’s "Freelance Isn’t Free Act" in 2017, freelancers there have reclaimed over $2.5 million in unpaid invoices. With California now setting similar standards, we anticipate a significant positive impact for the state’s freelance workforce, and hope this movement continues to expand across the country.

For more details on the law, you can read the full bill here: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB988

And if you need any assistance creating a contract, you can use our FREE contract creator here: https://freelancersunion.org/contract/