On September 28, 2024, California Governor Gavin Newsom signed the Freelance Worker Protection Act (FWPA) into law, effective January 1, 2025. This law enhances protections for freelance independent contractors, requiring businesses to obtain written contracts for specified professional services, and requiring that such freelance workers are timely paid. Here are some key elements of the law.
What Does the New Law Require?
- Written Contracts: The hiring business must obtain signed contracts including the freelancer’s name, service details, payment terms, and submission deadlines for invoices.
- Record Keeping: Contracts must be retained for at least four years.
- Timely Payments: Full payment for services is due by the contract date, or within 30 days of work completion if no completion date is specified.
- Anti-Retaliation: Prohibits discrimination against freelancers exercising their rights under the new law.
Who is Covered?
- What is a Freelance Worker? Independent contractors providing professional services worth $250 or more.
- Who Is Subject to the New Law? All individuals and companies in California, except government entities and personal service hires (hired for the benefit of the person and not a business).
What Is the Penalty for Noncompliance?
- Failure to provide a written contract can result in $1,000 penalty.
- If the hiring party fails to pay the contracted amount timely, the freelance worker can be awarded damages equal to twice the outstanding amount under the contract.
- If the hiring party violates any other provision of the statute, it is subject damages equal to the value of the contract or the work performed, whichever is greater.
What Should California Businesses Do Now?
- Businesses must create contracts for all independent contractors who are paid $250 or more for their services. If they already have existing contracts, they should review and update them to meet FWPA requirements.
- Businesses should consult legal counsel for additional contract terms.
- All businesses should take steps to ensure they are complying and timely paying their freelance workers, as violations can lead to civil actions and penalties.
RPNA’s business and employment attorneys are uniquely suited to guide you on your compliance with these and the many other new laws coming into effect in 2025:
Contact Us Today:
- Muhammed T. Hussain: mth@rpnalaw.com
- Phone:📞 818-992-9999
Muhammed Hussain
Muhammed Hussain is an experienced attorney with over 15 years of experience litigating and advising client on employment and business litigation matters
