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Nov
2016
10

Freelance Isn’t Free: NYC Passes Wage Theft Bill With Stiff Penalties to Protect Gig Economy Workers

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The City Council of New York unanimously passed legislation late last month designed to protect freelancers against wage theft. The Freelance Isn’t Free Act imposes stiff penalties on employers who fail to pay their freelancers promptly. It is an early attempt to contend with the policy challenges presented by the emerging “gig economy”:

“New York is in some ways at the center of the gig economy, of the evolution of the economy to more independent and contingent work,” Brad Lander, the councilman who introduced the legislation, said.

According to one estimate by the economists Lawrence Katz and Alan Krueger, this group [of workers] grew to almost 16 percent of the work force in late 2015 from roughly 10 percent in early 2005.

The new law would entitle freelancers to double damages and attorney fees, as well as require written contracts for any project over $800. It is enthusiastically supported by The Freelancers Union:

According to a 2014 survey, freelancers lose an average of $5,968 in unpaid income yearly, detracting 13 percent of the average survey respondent’s annual income. Half of freelancers said they had trouble getting paid in 2014, and 71 percent said they have had trouble collecting payment at some point in their career.

The Freelancers Union, a group with around 150,000 members that advocates on behalf of “gig economy workers,” vocally supported the bill, calling it the “first of its kind” in the nation.

The bill saw near-universal support across the political spectrum:

“Few parties are opposed to the measure “because it’s such an elemental fairness issue,” said Sara Horowitz, founder and executive director of the Freelancers Union. “If people do the work, they should get paid.” 

The legislation is supported by various labor unions and worker advocacy groups. Business representatives also supported the measure, including the Brooklyn Chamber of Commerce, as well as individual businesses that support independent workers such as WeWork, the chain of co-working spaces.

The New York Staffing Association was the only group to express any reservations. Mayor Bill de Blasio is expected to sign the bill.

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