New Rights for Freelancers in California, Illinois, and New York
For years, freelancers have raised concerns about getting paid late—or not at all—by clients. In response, California, Illinois, and New York have introduced new laws aimed at protecting freelance workers. These regulations require written contracts between businesses and freelancers, along with prompt payments for agreed-upon work. Companies that ignore these rules risk hefty penalties, including double the owed payments and additional fines.
Highlights of the New Laws
The legislation includes:
- California Freelance Worker Protection Act
- Illinois Freelance Worker Protection Act
- New York State’s Freelance Isn’t Free Act
Notably, New York City has enforced its own Freelance Isn’t Free Act since 2017. Now, the new state-level version extends these protections across all of New York and works alongside the original city law. All three states are addressing the financial and professional challenges many independent contractors face by creating clearer and more secure rules for business arrangements.
Who Benefits from These Protections?
The laws apply specifically to freelancers considered independent contractors, whether they work as sole proprietors or as the only owner of an LLC or corporation. However, there are some variations between states:
- In California and New York, freelancers with single-owner LLCs and corporations qualify for coverage.
- In Illinois, LLCs or corporate structures are excluded, as the law applies only to individuals operating as one-owner businesses with no business entity.
In addition, California’s law specifies a range of covered professions, including:
- Writers, editors, translators, and illustrators
- Marketing consultants, digital content creators, and graphic designers
- Specialized performers teaching short master classes
- Appraisers, fine artists, and certain licensed beauty professionals like cosmetologists and estheticians
On the other hand:
- Illinois excludes construction workers.
- New York leaves out lawyers, sales representatives, medical professionals, and construction contractors.
New Requirements for Hiring Freelancers
Companies must now use written contracts if the cost of work within a 120-day timeframe meets certain amounts:
- $250 or more in California
- $500 or more in Illinois
- $800 or more in New York
The contracts must clearly outline important details like:
- The names and addresses of both the freelancer and the client.
- A description of the work being done and how much it’s worth.
- Payment terms (how and when the freelancer will be paid).
- Any timelines for the delivery of services.
- Deadlines for submitting necessary documentation (e.g., invoices or activity records).
Both hard-copy and digital agreements will work, but hiring businesses must keep a copy of all agreements on record:
- Four years in California
- Two years in Illinois
- Six years in New York
What Happens If Freelancers Aren’t Paid?
The penalties for businesses not following these rules can add up significantly.
- For delayed or missed payments, companies may be forced to pay double the owed amount plus any attorney’s fees or related costs. If a freelancer was originally owed $10,000, the client could end up paying $20,000 plus legal fees.
- Failing to provide a proper written agreement can also lead to separate fines:
- $1,000 per violation in California
- $500 per violation in Illinois
- $250 per violation in New York
Retaliating against a freelancer (e.g., intimidation, blacklisting, or breaking future agreements) can bring steep penalties, too. Examples: in Illinois and New York, retaliation may result in fines equal to the project’s contract value. In New York, ongoing offenses could also trigger larger civil penalties—up to $25,000.
Payment Rules
Once work has started under the terms of a contract, businesses must avoid pressuring freelancers to take lower payments just to get paid faster. No matter what, freelancers must be paid within 30 days after finishing their work—if the deadline isn’t already specified in the agreement.
Protecting Freelancers from Retaliation
The laws protect freelancers who speak up for their rights. Businesses are legally barred from retaliating through threats, harassment, payback efforts (e.g., blacklisting), or any form of intimidation.
Key Changes for Freelancers and Businesses
Here’s a quick summary of what these laws mean going forward:
- Contracts Are a Must: Freelancers paid above specific thresholds ($250–$800, depending on the state) now require clear, legally binding agreements.
- Payment Deadlines: Businesses have to pay freelancers on time, either by the agreement date or within 30 days of completed work if no date is
