CLIENT ALERT: New York’s Freelance Isn’t Free Acts—What Businesses Need to Know

New York businesses that retain freelancers now face compliance obligations under two overlapping Freelance Isn’t Free Acts (“FIFAs”): the original FIFA enacted by New York City in 2017 (the “NYC FIFA”), and the statewide FIFA enacted by the New York State legislature in 2024 (the “NYS FIFA”). See N.Y.C. Admin. Code sections 20-927 to 20-930 et seq.; N.Y. Gen. Bus. Law sections 1410-1415. These two FIFAs share a common structure but differ in ways that materially affect contract drafting, payment timing, record retention, dispute strategy, and litigation exposure. For businesses operating in New York City, both laws apply simultaneously, and a single freelance relationship can trigger claims under either or both statutes.

KEY TAKEAWAYS

• New York’s overlapping FIFAs each impose written contract, timely payment, and anti-retaliation obligations on businesses that retain freelance workers for services valued at $800 or more. Both laws apply simultaneously in New York City.
• The NYS FIFA materially increases compliance risk by requiring delivery of contracts to freelancers, mandating six-year retention, creating a presumption in favor of a freelancer’s stated terms if the hiring party cannot produce a written contract, and authorizing enforcement by the New York Attorney General’s Labor Bureau.
• Courts have begun to construe the definition of a “hiring party” subject to the FIFAs broadly. The First Department has stated that the NYC FIFA does not require direct contracting between a freelance worker and the hiring party, and a federal court has held that an entity may qualify as a hiring party even if it obtains freelance services through subcontractors. See Chen v. Romona Keveza Collection LLC, 208 A.D.3d 152, 159 (1st Dep’t 2022); Ortiz v. Consol. Edison Co. of N.Y., Inc., 801 F. Supp. 3d 260, 278–81 (S.D.N.Y. 2025). At the same time, trial courts have found that some intermediaries, such as dispatch networks or talent management companies, fall outside the statutes. See Buttar v. Elite Limousine Plus, Inc., No. 651088/2019, 2022 WL 912142, at *11 (Sup. Ct. N.Y. Cty. Mar. 29, 2022); Iams v. 10X Mgt. LLC, No. 656266/2019, 2020 WL 3000551, at *5 (Sup. Ct. N.Y. Cty. May 29, 2020). The precise limits remain unsettled.
• Arbitration clauses governed by the Federal Arbitration Act (“FAA”) are enforceable against NYC FIFA claims, and likely against NYS FIFA claims as well. The First Department so held in Snazzi Reporting, Inc. v. Veritext, LLC, 231 A.D.3d 687 (1st Dep’t 2024), reasoning that the FAA preempts the NYC FIFA’s anti-waiver provision. Because the NYS FIFA’s anti-waiver language is materially identical, courts are likely to reach the same result.
• Enforcement is active and growing. Since the NYC FIFA took effect, the City has received nearly 5,000 complaints and recovered more than $3.5 million for freelancers. The NYS FIFA grants enforcement authority to the Attorney General, though no reported enforcement actions have been identified to date.
• Geographic scope matters. At least one trial court in New York interpreting the NYC FIFA has applied an “impact” test and held that a freelancer based out of state and working remotely could not invoke the NYC FIFA where the impact of nonpayment was felt outside New York City. Turner v. Sheppard Grain Enters., LLC, 127 N.Y.S.3d 260, 262–63 (Sup. Ct. N.Y. Cty. 2020). The NYS FIFA is silent on territorial reach, but New York’s presumption against extraterritoriality suggests a sufficient in-state nexus is required.

 

WHAT THE FIFAs REQUIRE AND HOW THEY ARE ENFORCED

Both statutes impose three core obligations on a “hiring party” that retains a qualifying freelance worker. First, there must be a written contract identifying the parties, describing the services, stating compensation terms, and specifying payment dates or mechanisms. The NYS FIFA also requires the contract include a deadline for the freelancer to submit a list of services rendered (N.Y. Gen. Bus. Law § 1412(2)(d)). Second, payment must be made by the contractual date or, if none is specified, within 30 days of completion of services; once a freelancer has begun work, the hiring party may not condition timely payment on the freelancer’s acceptance of reduced compensation. Third, the hiring party may not retaliate against a freelancer for exercising statutory rights.

The statutes diverge on recordkeeping. The NYC FIFA requires each party to retain a copy of the contract but does not specify a retention period or require the hiring party to furnish a copy to the freelancer. The NYS FIFA requires the hiring party to deliver a copy of the contract to the freelancer, retain it for at least six years, and produce it to the Attorney General upon request. If the hiring party cannot produce the contract, the NYS FIFA creates a presumption that the freelancer’s stated terms are the agreed-upon terms.

The available remedies are significant. A freelancer who prevails on a payment claim under either FIFA may recover double damages, injunctive relief, and attorneys’ fees and costs. A prevailing freelancer who also proves a written-contract violation may recover additional statutory damages equal to the value of the underlying contract.

The NYC FIFA is enforced by the New York City Department of Consumer and Worker Protection (“DCWP”), which operates a complaint and navigation program. When a freelancer files a complaint, DCWP notifies the hiring party, which has 20 days to respond. A hiring party that fails to respond faces a rebuttable presumption in any subsequent civil action that it committed the alleged violations, a procedural consequence courts have already enforced at the summary-judgment stage. Approximately 86% of complaints filed with DCWP between 2019 and 2023 alleged late payment or nonpayment. Recent settlements underscore the enforcement trajectory: in February 2026, DCWP announced a $528,817 settlement with Splashlight, a creative production company, for systematic nonpayment of 350 freelancers.

The NYS FIFA is enforced by the Attorney General’s Labor Bureau, which has authority to investigate, seek injunctive relief, obtain restitution, and impose escalating civil penalties. No reported NYS FIFA enforcement actions have been identified to date, but the history of the NYC FIFA suggests that a statute can start quietly and become an active enforcement vehicle as agencies and complainants gain familiarity with it.

PRACTICAL IMPLICATIONS

The combination of dual coverage, active agency enforcement, and evolving case law creates a compliance environment that businesses should navigate carefully. Companies should consider the following:

• Update contract templates and centralize retention. Ensure freelance agreements cover all required terms, specify payment timing, are actually delivered to the freelancer, and are stored in a retrievable system for at least six years.
• Tighten payment workflows. Build accounts-payable processes that flag contractual payment dates and the default 30-day rule. Late payment and non-payment are the most common bases for FIFA complaints.
• Review indirect engagement models. If the business obtains freelance labor through agencies, staffing vendors, subcontractors, or platforms, assess whether the company could be characterized as a “hiring party” subject to the FIFAs.
• Respond promptly to complaints. Treat DCWP and Attorney General inquiries with the same urgency as a demand letter. Failure to respond to a DCWP complaint can trigger a rebuttable presumption in later civil litigation that a FIFA violation occurred.
• Include arbitration clauses in freelance agreements. FAA-governed arbitration clauses are enforceable against NYC FIFA claims, and likely against NYS FIFA claims as well. Such clauses meaningfully affect forum, procedure, and settlement dynamics.
• Train relevant teams. Procurement, business-unit leaders, production staff, and accounts payable should all understand the obligations the FIFAs impose; compliance cannot rest with the legal department alone.

 

CONCLUSION

New York’s FIFAs significantly expand compliance obligations for businesses that rely on independent contractors. Several important issues remain unsettled, including the outer limits of what constitutes a “hiring party” subject to the FIFAs and the territorial reach of the NYS FIFA. That uncertainty is another reason to tighten forms, recordkeeping, payment practices, and dispute-planning now. Sher Tremonte LLP will continue to monitor developments.

For questions about compliance under either FIFA or to discuss specific freelance arrangements, please contact your Sher Tremonte attorney.

 

This client alert is for informational purposes only and does not constitute legal advice. The law in this area is continuing to develop, and businesses should consult counsel regarding specific facts and contracts.

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