New York implemented the Freelancing Isn’t Free Act in spring of 2018 that changes rules around paying contractors for their work. In this decision, they created terms for how long a company can go between approving a contractor’s work and paying them for it. The new law changes some things for companies using contract workers in the state.
The legislation is in place for a very important reason: to protect gig workers who depend on their income for each job. It can be detrimental if they have to wait 30-60 days between a job’s completion and the payout. That’s why New York legislators are implementing rules to protect them from unjust payment practices.
If you’re a company with a presence in New York, here’s what you need to know.
New York’s New Labor Rules
The new law, called The Freelance Isn’t Free Act, outlines some key protections for contractors who need to be paid for their work. Under this new law, there must be clear contract terms around pay for the contractor before the work begins. If there isn’t a specific timeline for pay—such as Net 90—the payment must be delivered within 30 days of the work being completed.
This law seeks to change unfair wage practices for contractors in the state after a few instances where contractors sued their clients and won. But, the law has a few key parameters that must be met before it can be enforced.
Paying Contractors on Time
One of the keys to staying within the new law is making sure work order approval is timely. When a contractor completes a given task and submits the work to their client, the client often has to approve the work before the payment process is initiated.
The best way to stay within the law in New York then is to ensure a swift approval process after each work order to avoid going over payment deadlines. This way, clients have as much extra time as possible to address any issues that arise during the payout process. Avoiding a late payment to a contractor can now potentially save your company thousands in legal fees.
Paying contractors on time is also important for relationship building. If the contractor completed the work on time and to your specifications, you probably want to work with them again. Contractors are more likely to accept work from you in the future if they are paid on time.
What this Law Means for Companies
The new law does make some important stipulations about where and when these rules apply. For instance, contractors must have a contract for work paying over $800. Without this contract in place, the company that hired the contractor will be penalized.
For companies, these laws mean they need to be more diligent about their contracts and payout policies on any work they do in New York to avoid legal trouble. Without following the new law, companies face fines, court, and many other hassles that can damage their reputation and their bottom-line.
How Field Nation Will Help
At Field Nation, we take compliance and fair pay seriously. In the coming months, we will be evaluating our platform policies to help companies ensure they are paying on time. Our marketplace makes it easy for you to pay your contractors on time. Just take time to approve work orders after they’re completed and fully fund your account so we can take care of the payment process for you.
Ultimately, this law is about more than just a legal requirement. Fair payment practices mean good working relationships, and that can do more for your bottom-line in the long-run.
If you have any questions about the new law or what this means for your work on Field Nation, don’t hesitate to reach out to our support team.