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S08369 Summary:

S08369 Actions:

S08369 Committee Votes:

S08369 Floor Votes:

S08369 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         8369--B
 
                    IN SENATE
 
                                    February 17, 2022
                                       ___________
 
        Introduced  by Sens. GOUNARDES, BIAGGI, CLEARE, HOYLMAN, JACKSON, KRUEG-
          ER, MYRIE, RAMOS, RIVERA, RYAN, SALAZAR, SEPULVEDA,  SKOUFIS  --  read
          twice  and  ordered  printed,  and when printed to be committed to the
          Committee on Labor --  reported  favorably  from  said  committee  and
          committed  to  the  Committee on Finance -- committee discharged, bill
          amended, ordered reprinted as amended and recommitted to said  commit-
          tee  --  committee  discharged,  bill  amended,  ordered  reprinted as
          amended and recommitted to said committee
 
        AN ACT to amend the labor law, in relation to  enacting  the  "freelance
          isn't free act"
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the "freelance isn't free act".
     3    § 2. The labor law is amended by adding a new section 191-d to read as
     4  follows:
     5    § 191-d. Payment of wages for freelance workers. 1.  (a) "Construction
     6  contractor"  means  any  person,  sole  proprietor, partnership,   firm,
     7  corporation,   limited liability company,  association  or  other  legal
     8  entity  who  by  oneself or through others offers to undertake, or holds
     9  oneself   out as being able to  undertake,    or    does  undertake    a
    10  construction project.
    11    (b) "Construction  project"  means  the  providing  of  any  labor  or
    12  services, and the use of any materials or equipment in order  to  alter,
    13  build, excavate, add to, subtract from, improve, repair, maintain, reno-
    14  vate, move, wreck or demolish any bridge, building, highway, road, rail-
    15  road,  land, tunnel, sewer, drainage or other structure, project, devel-
    16  opment,  or improvement, or the doing of any part thereof, including the
    17  erection of scaffolding or other structures or works in connection ther-
    18  ewith.
    19    (c) "Freelance  worker"  means  any  natural  person  or  organization
    20  composed of no more than one natural person, whether or not incorporated
    21  or  employing  a trade name, that is hired or retained as an independent
    22  contractor by a hiring party to provide  services  in  exchange  for  an
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13843-13-2
        S. 8369--B                          2
 
     1  amount  equal to or greater than eight hundred dollars, either by itself
     2  or when aggregated with all contracts  for  services  between  the  same
     3  hiring  party  and freelance worker during the immediately preceding one
     4  hundred twenty days, but does not include:
     5    (i)  any  person  who,  pursuant  to the contract at issue, is a sales
     6  representative as defined in section one hundred  ninety-one-a  of  this
     7  article;
     8    (ii)  any  person  engaged  in  the  practice  of  law pursuant to the
     9  contract at issue and who is a member in good standing of the bar of the
    10  highest court of any state, possession, territory, commonwealth  or  the
    11  District of Columbia and who is not under any order of court suspending,
    12  enjoining,  restraining, disbarring or otherwise restricting such person
    13  in the practices of law;
    14    (iii) any person who is a licensed medical professional; or
    15    (iv) any person who is a construction contractor.
    16    (d) "Hiring party" means any person who retains a freelance worker  to
    17  provide any service, other than:
    18    (i) the United States government;
    19    (ii)  the state of New York, including any office, department, agency,
    20  authority or other body of the state including the legislature  and  the
    21  judiciary;
    22    (iii)  a  municipality,  including  any  office, department, agency or
    23  other body of a municipality; or
    24    (iv) any foreign government.
    25    2. (a) Except as otherwise provided by  law,  the  contracted  compen-
    26  sation shall be paid to a freelance worker either:
    27    (i)  on or before the date such compensation is due under the terms of
    28  the contract; or
    29    (ii) if the contract does not specify when the hiring party  must  pay
    30  the  contracted compensation or the mechanism by which such date will be
    31  determined, no later than thirty days after the completion of the  free-
    32  lance worker's services under the contract.
    33    (b)  Once a freelance worker has commenced performance of the services
    34  under the contract, the hiring party shall not require as a condition of
    35  timely payment that the freelance worker accept less  compensation  than
    36  the amount of the contracted compensation.
    37    3.  (a)  Whenever  a  hiring party retains the services of a freelance
    38  worker, as such terms are defined in this section, the contract  between
    39  such party and worker shall be reduced to writing. The hiring party must
    40  furnish  a copy of such written contract, either physically or electron-
    41  ically, to the freelance worker and each party to the  written  contract
    42  shall retain a copy thereof.
    43    (b)  The  written  contract shall include, at a minimum, the following
    44  information:
    45    (i) the name and mailing address of both  the  hiring  party  and  the
    46  freelance worker;
    47    (ii)  an  itemization  of all services to be provided by the freelance
    48  worker, the value of  the  services  to  be  provided  pursuant  to  the
    49  contract, and the rate and method of compensation;
    50    (iii)  the  date  on  which  the  hiring party must pay the contracted
    51  compensation or the mechanism by which such date will be determined; and
    52    (iv) the date by which a  freelance  worker  must  submit  a  list  of
    53  services  rendered  under  such contract to the hiring party in order to
    54  meet any internal processing deadlines of  such  hiring  party  for  the
    55  purposes  of  compensation being timely rendered by the agreed-upon date
    56  as stipulated in subparagraph (iii) of this paragraph.
        S. 8369--B                          3
 
     1    (c) The commissioner may by rule require additional  terms  to  ensure
     2  that  the  freelance  worker and the hiring party understand their obli-
     3  gations under the contract.
     4    (d)  Such  hiring  party shall be required to keep such contract for a
     5  period of no less than six years and shall make such contract  available
     6  to  the  commissioner  upon  request.  The  failure of a hiring party to
     7  produce such contract, upon request of the commissioner, shall give rise
     8  to a presumption that the terms that the freelance worker has  presented
     9  are the agreed upon terms.
    10    3-a.  The  commissioner  shall  make  available model contracts on the
    11  website of the department for use by the general public at no cost. Such
    12  model contracts shall be made available in English  and  in  the  twelve
    13  languages most commonly spoken by limited English proficient individuals
    14  in the state.
    15    4.  No  hiring  party,  as defined in this   section,  shall threaten,
    16  intimidate, discipline, harass, deny a work opportunity to, or discrimi-
    17  nate against a  freelance worker,  or take any other action that  penal-
    18  izes  a  freelance  worker for, or is reasonably likely to deter a free-
    19  lance worker from, exercising   or attempting   to  exercise  any  right
    20  guaranteed  under this article, or from obtaining any future work oppor-
    21  tunity because the freelance  worker  has done so.
    22    5. (a) Any freelance worker or his or  her  authorized  representative
    23  may file with the commissioner a complaint regarding a violation of this
    24  article for an investigation of such complaint and statement setting the
    25  appropriate  remedy,  if  any.  The commissioner shall keep the names of
    26  freelance workers who are the subject of an  investigation  confidential
    27  until such time that disclosure is necessary for resolution of an inves-
    28  tigation  or  a  complaint.  Failure  of a hiring party to keep adequate
    29  records or provide a written contract as required under this section, in
    30  addition to exposing such hiring party  to  penalties  authorized  under
    31  this  section,  shall not operate as a bar to filing of a complaint by a
    32  freelance worker. In such a case the hiring  party  in  violation  shall
    33  bear  the  burden  of  proving that the complaining employee was paid in
    34  accordance with this section.
    35    (b) Each freelance worker who files a complaint regarding a  violation
    36  of  this  article or a rule or regulation promulgated thereunder,  shall
    37  be  provided  with  a  written  description  of   the anticipated  proc-
    38  essing  of  the complaint, including   investigation,   case conference,
    39  potential  civil  and  criminal  penalties,  and collection procedures.
    40    (i) Each freelance worker and his or her   authorized   representative
    41  shall    be notified in writing of any case conference before it is held
    42  and given the opportunity to attend.
    43    (ii) Each freelance worker and his or her  authorized   representative
    44  shall    be   notified   in writing of any award and collection of civil
    45  penalties.
    46    6. The commissioner  shall  have  the  following  duties,  powers  and
    47  authority:
    48    (a) The commissioner shall investigate and attempt to adjust equitably
    49  controversies  between  freelance workers and hiring parties relating to
    50  this  article.
    51    (b) The commissioner may take assignments of claims  for  wages  under
    52  this  article  from freelance workers or third parties in trust for such
    53  freelance workers or for the benefit of various funds for such freelance
    54  workers. All such assignments shall run to the commissioner and  his  or
    55  her successor in office. The commissioner may sue hiring parties on wage
    56  claims thus assigned, with the benefits and subject to the provisions of
        S. 8369--B                          4
 
     1  existing  law applying to actions by freelance workers for collection of
     2  wages. He or she may join in a single action any number of  wage  claims
     3  against the same hiring party.
     4    (c)  (i)  The commissioner is hereby authorized and empowered to enter
     5  into reciprocal agreements with the labor  department  or  corresponding
     6  agency of any other state or with the person, board, officer, or commis-
     7  sion  authorized  to act on behalf  of  such  department or  agency, for
     8  the collection in such other states of claims and  judgments  for  wages
     9  based upon claims assigned to the commissioner.
    10    (ii) The commissioner may, to the extent provided  for  by  any recip-
    11  rocal  agreement entered into by law or with any agency of another state
    12  as herein provided, maintain actions in the courts of such  other  state
    13  for the collection of claims and judgments for wages and may assign such
    14  claims  and  judgments  to  the labor department or agency of such other
    15  state for collection to the  extent  that  such  an  assignment  may  be
    16  permitted  or  provided  for  by the law of  such state or by reciprocal
    17  agreement.
    18    (iii) The commissioner may, upon the  written  consent  of  the  labor
    19  department  or  other  corresponding  agency  of  any  other state or of
    20  any  person,   board, officer, or commission of such state authorized to
    21  act  on  behalf  of   such   labor department or  corresponding  agency,
    22  maintain  actions in   the courts of this state upon assigned claims and
    23  judgments  for  wages  arising  in  such  other state in the same manner
    24  and to the same extent   that  such  actions  by  the  commissioner  are
    25  authorized  when  arising  in  this  state. However, such actions may be
    26  maintained  only  in cases where   such other state by law or reciprocal
    27  agreement extends a like comity to  cases arising in this state.
    28    (d) Nothing in  this  section  shall   be   construed   as   requiring
    29  the  commissioner   in   every  instance  to  investigate and attempt to
    30  adjust controversies, or to take assignments of wage claims,   but he or
    31  she shall  be deemed vested with discretion in such matters.
    32    7. (a) (i) A freelance worker alleging a violation of this article may
    33  bring an action in any court of competent jurisdiction for damages.
    34    (ii) Any action alleging a violation  of  subdivision  three  of  this
    35  section shall be brought within two years after the acts alleged to have
    36  violated this article occurred.
    37    (iii)  Any  action  alleging  a  violation  of subdivision two of this
    38  section or subdivision four of this section shall be brought within  six
    39  years after the acts alleged to have violated this article occurred.
    40    (iv) Within ten days after having commenced a civil action pursuant to
    41  this  subdivision,  a plaintiff shall serve a copy of the complaint upon
    42  an authorized representative of the commissioner. Failure to so serve  a
    43  complaint does not adversely affect any plaintiff's cause of action.
    44    (v) A plaintiff who solely alleges a violation of subdivision three of
    45  this section must prove that such plaintiff requested a written contract
    46  before the contracted work began.
    47    (b)  (i)  A  plaintiff who prevails on a claim alleging a violation of
    48  subdivision two of this section shall be awarded damages as described in
    49  this subdivision and an award of reasonable attorneys' fees and costs.
    50    (ii) (A) A plaintiff who prevails on a claim alleging a  violation  of
    51  subdivision  three of this section shall be awarded statutory damages of
    52  two hundred fifty dollars.
    53    (B) A plaintiff who prevails on a claim alleging a violation  of  this
    54  section and on one or more claims under other provisions of this article
    55  shall  be awarded statutory damages equal to the value of the underlying
        S. 8369--B                          5
 
     1  contract for the violation in addition to the remedies specified in this
     2  article for such other violations.
     3    (iii) In addition to other damages awarded pursuant to this article, a
     4  plaintiff  who  prevails  on a claim alleging a violation of subdivision
     5  two of this section is entitled to an award of double  damages,  injunc-
     6  tive relief, and other such remedies as may be appropriate.
     7    (iv)  In  addition to any other damages awarded pursuant to this arti-
     8  cle, a plaintiff who prevails on a claim alleging a violation of  subdi-
     9  vision  four  of  this section is entitled to statutory damages equal to
    10  the value of the underlying contract for each  violation  arising  under
    11  such subdivision.
    12    8. (a)(i) Where reasonable cause exists to believe that a hiring party
    13  is  engaged  in a pattern or practice of violations of this article, the
    14  attorney general may commence a civil action on behalf of the state in a
    15  court of competent jurisdiction.
    16    (ii) An action pursuant to subparagraph (i) of this paragraph shall be
    17  commenced by filing a complaint setting forth  facts  relating  to  such
    18  pattern  or practice and requesting relief, which may include injunctive
    19  relief, civil penalties, and any other appropriate relief.
    20    (iii) Nothing in this paragraph prohibits:
    21    (A) a person alleging a violation of this article from filing a  civil
    22  action based on the same facts as a civil action commenced by the attor-
    23  ney general pursuant to this section; or
    24    (B) the commissioner from sending a notice of complaint, unless other-
    25  wise barred from doing so.
    26    (b)  In  any  civil action commenced pursuant to this subdivision, the
    27  trier of fact may impose a civil penalty of not  more  than  twenty-five
    28  thousand  dollars  for  a  finding  that a hiring party has engaged in a
    29  pattern or practice of violations of this article. Any civil penalty  so
    30  recovered shall be paid into the general fund.
    31    9.  (a)  Except  as  otherwise  provided  by  law,  any provision of a
    32  contract purporting to waive  rights  under  this  section  is  void  as
    33  against public policy.
    34    (b)  The provisions of this section supplement, and do not diminish or
    35  replace, any other basis of  liability  or  requirement  established  by
    36  statute or common law.
    37    (c)  Failure  to  comply  with the provisions of this section does not
    38  render any contract between a hiring party and a freelance  worker  void
    39  or  voidable  or otherwise impair any obligation, claim or right related
    40  to such contract or constitute a defense to any action or proceeding  to
    41  enforce, or for breach of, such contract.
    42    (d)  No  provision of this section relating to freelance workers shall
    43  be construed as providing a determination about the legal classification
    44  of any such worker as an employee or independent contractor.
    45    10. The department shall conduct a public awareness outreach campaign,
    46  which shall include making information available on its website,  other-
    47  wise  informing  hiring  parties  of the provisions of this section, and
    48  establishing a means for assistance by a natural  person  through  phone
    49  and e-mail.
    50    11.    (a)  No later than six months after the commissioner sends to a
    51  freelance worker either a hiring party's response and accompanying mate-
    52  rials or a notice of non-response pursuant to section one hundred  nine-
    53  ty-six-a  of  this  article,  the  commissioner shall send the freelance
    54  worker a survey requesting additional information about  the  resolution
    55  of  the  freelance worker's claims. Such survey shall ask whether or not
    56  the freelance worker pursued any such claims  in  court  or  through  an
        S. 8369--B                          6
 
     1  alternative  dispute  resolution  process  and whether or not the hiring
     2  party ultimately paid any or all of the compensation the freelance work-
     3  er alleged was due or if the matter was resolved in a different  manner.
     4  Such  survey  shall  state clearly that response to the survey is volun-
     5  tary.
     6    (b)  The  commissioner  shall  collect  and  track  information  about
     7  complaints   alleging   violations  of  this  article.  The  information
     8  collected shall include, at minimum:
     9    (i) the identity of the hiring party alleged  to  have  violated  this
    10  article;
    11    (ii) the freelance worker's occupation;
    12    (iii)  the  section  of  this  article  that  was alleged to have been
    13  violated;
    14    (iv) the value of the contract;
    15    (v) the response or non-response from the hiring party; and
    16    (vi) information from a completed survey identified in  paragraph  (a)
    17  of this subdivision.
    18    (c) One year after the effective date of this section, and every fifth
    19  year  thereafter by November first, the commissioner shall submit to the
    20  legislature and publish on its website a report regarding the effective-
    21  ness of the applicable provisions of this article at improving freelance
    22  contracting and payment practices.   Such report  shall  include,  at  a
    23  minimum:
    24    (i) the number of complaints the commissioner has received pursuant to
    25  such provisions;
    26    (ii)  the  value  of  the  contracts disaggregated into ranges of five
    27  hundred dollars and by section of this  article  alleged  to  have  been
    28  violated;
    29    (iii)  the  numbers  of  responses  and  non-responses received by the
    30  commissioner disaggregated by contract value into ranges of five hundred
    31  dollars and by section of this article alleged to have been violated;
    32    (iv) the proportion of surveys received from  freelance  workers  that
    33  indicate  that  they pursued their claims in court and the proportion of
    34  surveys received from freelance workers that indicate that they  pursued
    35  their  claims  through  an  alternative dispute resolution process and a
    36  summary of the outcomes of such cases; and
    37    (v) legislative recommendations, including  consideration  of  whether
    38  certain  occupations should be exempted from the scope of the definition
    39  of freelance worker in this section.
    40    § 3. The provisions of this act shall not be construed or  interpreted
    41  to  override or supplant any of the provisions of chapter 10 of title 20
    42  of the administrative code of the city of New York.
    43    § 4. This act shall take effect on the one hundred eightieth day after
    44  it shall have become a law and shall apply  only  to  contracts  entered
    45  into  on  or after such effective date. Effective immediately, the addi-
    46  tion, amendment and/or repeal of any rules or regulations necessary  for
    47  the  implementation  of this act on its effective date are authorized to
    48  be made on or before such effective date.