What We Can Learn About Hiring Freelancers From New York City's Freelance Isn't Free Act

Hiring freelancers in New York City now comes with added responsibilities and penalties if you run afoul. See how such a bill could affect your business.
June 19, 2017

Thanks to ever-improving technology, the ease of working wherever and whenever you want makes freelancing and hiring freelancers a popular option. 

According to the Freelancing in America report commissioned by Upwork and the Freelancers Union and conducted by Edelman Intelligence, 35 percent of the U.S. workforce in 2016 was freelance and earned an estimated $1 trillion. And 63 percent of the 6,000 U.S. workers surveyed said they were freelancing by choice, not necessity—a jump of 10 percentage points since 2014.

Recognizing the growing freelance workforce and taking into consideration their special circumstances, New York City recently passed the Freelance Isn't Free Act. Designed to protect freelancer's rights and ensure they get paid in a timely manner, this act lays extra responsibility on employers to ensure that they comply with certain rules when hiring freelancers.

Hiring Freelancers Shouldn't Be Free

The Freelance Isn't Free Act protects freelancers by granting them the right to a written contract and to be paid in full for work worth $800 or more within 30 days. The legislation calls for employer penalties for any violations involved in hiring freelancers. Employers could even be fined $25,000 if it's found that they have a pattern of not paying employees in a timely manner.

Opinions vary regarding the act and its effect on hiring freelancers in New York City. Employers who have freelanced themselves understand the challenges associated with going it alone.

Make your expectations known to the freelancer so that the work that's completed is satisfactory. Give detailed instructions and examples, when possible.

“I've been on both sides of the table," says Kristin Hege, president and co-founder of Wired PR Group. “Before I started my own agency, I worked as a freelancer. I lived by the 30-day rule, as most contractors do, and wouldn't continue to do work for a client if the company went over 45 days. Most freelancing communities are tight-knit ones. You don't want to be the company that has a reputation for not paying on time."

If you want quality work done for your business by a freelancer, it's important to pay on time, continues Hege. “You may be able to get 30 days out of them, but the best ones have a good client base going, so they'll likely move on from you and tell others about it," she says. "Freelancers should be given the same consideration as any other service, Do you want electricity? Pay your bill. Do you want great freelancers? Pay your bill."

Yoni Levoritz, founder of the Levoritz Law Group, believes that the Freelance Isn't Free Act is likely to prompt employers to hire freelancers from outside of the city.

“There are no pros to the law for employers, who are in danger of being fined up to $25,000 if they don't pay for services, because freelancers are unhappy," says Levoritz. “It's a union-sponsored bill that uses legal fees as the sword to make employers pay for services that may very well be defective, but they're too afraid to contest. It's risky for business owners, because some lawyers will accept the case of an unhappy freelancer. The resulting legal fees will end up being in the tens of thousands for what could have initially been a very simple task."

Tips for Hiring Freelancers

In order to prevent problems when hiring freelancers, here are some steps you should consider.

Be clear. Make your expectations known to the freelancer so that the work that's completed is satisfactory. Give detailed instructions and examples, when possible.

Be realistic. Talk to the freelancer to ensure that your expectations are realistic. Open doors and pave the way so that when the person works for you, he or she can be successful.

Set a timeline. When everyone is on the same page regarding timing of the project, the freelancer is likely to complete the work as expected.

Communicate effectively. Whether you talk via phone, email or video, it's critical that you understand one another. It's hard to have a productive working relationship when there are unanswered questions and concerns.

Start slow. Rather than starting by giving the freelancer a large job with a lot of responsibility, have the person complete a minor task. That way if you're not happy you haven't invested much time or a great deal of cash. Small jobs will teach you how the freelancer performs under various circumstances.

Encourage feedback. Help make the process of hiring freelancers and working with them even better by encouraging feedback. Ask for their perspective of what it's like working for you, including any improvements that could be made and what they liked best.

Photo: Getty Images