Last Updated January 1, 2023
Let’s face it: New Yorkers are some of the hardest-working people in the world.
And all New Yorkers, including freelancers, should be paid for their good work. But payment, alone, isn’t enough. Freelancers should be paid timely and in full, just like everyone else.
That’s why New York City passed a law called the Freelance Isn’t Free Act (“FIFA”) in 2017.
FIFA is a very powerful tool for freelancers and independent contractors in New York City.
But how do you use it?
Rather than keep it a secret, I wanted to share everything you need to know about FIFA and how it can help you collect your unpaid freelance invoices.
By the end of this article, I can promise you will know the steps you need to take to ensure you collect on your past freelance work.
Overview of Article
In this article, I’m going to break down everything you need to know about FIFA. I will also explain the step-by-step process to make a FIFA claim.
In the first section, I’m going to tell you more about what FIFA is and how it works.
In the second section, I’m going to tell you why FIFA is so great at helping you get paid for your outstanding invoices.
In the third section, I’m going to tell you how to make (and win!) a FIFA claim.
In the fourth and final section, I will provide some philosophical thoughts on your journey to collect what you are rightfully owed.
Section 1: What is the Freelance Isn’t Free Act? How Does it Work?
1. What is the Freelance Isn’t Free Act?
FIFA is a New York City law that allows freelancers and independent contractors in New York City to receive double the unpaid value of their invoice if the hiring party refuses to pay, underpays, or pays late.
2. When did the Freelance Isn’t Free Act go into effect?
May 15, 2017. FIFA applies to any contract entered into after this date.
3. Why did the City pass the Freelance Isn’t Free Act?
The Freelancers Union, which is a non-profit advocacy organization for freelancers and independent contractors, is based in New York City.
After an in-depth study, the Freelancers Union found that nearly 1 in 3 New Yorkers is earning freelance income. It also found that freelancers contribute $31.4 billion dollars to the NYC economy annually!
However, the comprehensive study also found that 75% of freelancers faced difficulty receiving timely payment on at least one project. By some estimates, at least 150,000 New York City freelancers experience late payments or no payments each year.
Faced with these startling statistics and a history of payment abuses against freelancers, the City passed FIFA, which is now the most powerful legal payment protection for freelancers in the United States.
4. To whom does the Freelance Isn’t Free Act apply? (Or…do I qualify as a “freelancer” under the Freelance Isn’t Free Act?)
FIFA defines who qualifies as a “freelance worker” very, very broadly.
You qualify as a freelancer entitled to special benefits under FIFA as long as you are hired to provide any sort of service in exchange for compensation within New York City.
You qualify even if you have a company, so long as the company has no other employees.
Only salespeople, attorneys, medical professionals, and government contract work are excluded from protection under FIFA.
Here’s another way to think about it: If you receive a 1099 for your work, you qualify as a “freelancer” or independent contractor under FIFA.
Here is a list that we came up with of the different types of jobs to which FIFA could apply, assuming you did your work as a freelancer:
|Work Category||Specific Job|
|Construction||Drywallers, Painters, Carpenters, Electricians, Plumbers, Roofers|
|Artists||Musicians, Singers, Photographers, Videographers, Painters, Drawers, Sculptors, Actors, Set Designers, Dancers, Hair Stylists, Makeup Artists, Fashion Designers, Choreographers, Graffiti Artists|
|Technical||Editors, Writers, Software Developers / Coders / Programmers, Web Designers, System Administrators|
|Laborers||Mechanics, Auto Detailers & Car Wash Professionals, Custodial Engineers / Janitors, Lawn Service Professionals, Movers|
| Miscellaneous ||Wedding Coordinators, Childcare & Babysitters, Dog Walkers / Dog Sitters, Consultants, Architects, CPAs / Financial Planners / Tax Advisors, Tour Guides, Personal Assistants, Chauffeurs / Drivers, Chefs, Caterers, Exotic Dancers, Translators|
This list is only the beginning. There may be many other types of jobs to which FIFA applies.
The only real requirement for FIFA to apply to you is that you performed some freelance or independent contracting work within New York City limits.
In sum, FIFA covers nearly all individuals hired as independent contractors for pay.
5. Does the Freelance Isn’t Free Act still apply if the freelancer’s work was not performed in New York City?
According to the New York City Department of Consumer and Worker Protection, FIFA may still apply to you depending on the overall circumstances of the work.
This includes whether some portion of the work was performed in New York City, whether you were hired in New York City, and the extent of the hiring party’s operations within New York City.
This is an open question that has not yet been answered by the courts.
6. What are the Freelance Isn’t Free Act’s specific requirements?
FIFA requires several things:
- FIFA requires full payment to freelancers within 30 days of completing their work.
- FIFA requires hiring parties to provide a written contract if the freelancer performs at least $800 of work over a four-month period. FIFA penalizes the hiring party—not the freelancer—if a written contract is not provided.
- FIFA forbids hiring parties from offering freelancers less money in exchange for quicker payment.
- FIFA outlaws retaliation against and blacklisting of freelancers who pursue claims for non-payment.
7. Is compliance with the Freelance Isn’t Free Act mandatory?
Yes. Everyone, including companies and individuals, who hire freelancers in New York City must comply with FIFA.
Any contract attempting to waive a freelancer’s FIFA rights is void as a matter of law.
8. What information is required in the written contract between the freelancer and the hiring party?
At a minimum, the written contract must include all of the following:
- The name and mailing address of both the hiring party and freelancer;
- A list of all services the freelancer will provide;
- The value of the freelancer’s services;
- The rate and method of compensation for the freelancer’s services; and
- The date on which the hiring party must pay the freelancer’s services.
8. Does the Freelance Isn’t Free Act apply even if I don’t have a written contract?
Yes. FIFA applies to your freelance work even if you had an oral contract or a “handshake” agreement.
The only caveat is it might be harder to prove your claim if the hiring party denies they owe you anything.
10. What if the work I did was a long time ago? Is there a deadline to pursue my payment rights under FIFA?
It is not too late to make a FIFA claim for any freelance work performed after May 15, 2017.
Freelancers have six years to file a complaint for non-payment, underpayment, or an act of retaliation.
Freelancers have two years to file if the basis of the complaint is the failure of the hiring party to provide a written contract.
The sooner you file, the more likely you will recover money.
11. Do I have to actually submit an “invoice” for the Freelance Isn’t Free Act to apply to me?
No. Merely completing
your work and asking for payment is sufficient to trigger your rights under
Section 2: Why is the Freelance Isn’t Free Act so Great at Helping Freelancers Get Paid?
Remember: FIFA is mandatory and cannot be waived by anyone for any reason. This is just one reason FIFA is a powerful tool to help freelancers get paid. Even if the company that hires you wants to avoid FIFA, they can’t!
Here are some of the other reasons:
1. The penalties for failing to comply with the Freelance Isn’t Free Act are very stiff.
As a matter of law, a hiring party who fails to comply with FIFA’s written contract requirement owes the freelancer $250.
As a matter of law, a hiring party who refuses to pay the freelancer at all owes the freelancer double the amount of the invoice. For example, if your unpaid invoice is for $1,000, you are owed $2,000.
As a matter of law, a hiring party who only partially pays the freelancer owes the freelancer double the unpaid amount of the freelancer’s work.
For example, if your invoice is for $2,000, but the hiring party only paid you $1,000, you are still owed $2,000 in addition to the $1,000 already paid. (Here’s the math: $2K invoice minus $1K paid = $1K owed, but since the hiring party violated FIFA by not paying in full, the $1K owed is doubled to $2K owed.)
Arguably, a hiring party who fails to comply with FIFA’s written contract requirement and who refuses to pay the freelancer at all owes the freelancer triple the amount of the invoice.
For example, if you were paid nothing on your $3,000 invoice and the hiring party did not provide you with a written contract that meets FIFA’s requirements, arguably, you are owed $9,000! (That’s $3K for the original invoice, a $3K penalty for not paying in full within 30 days, and another $3K for failing to provide you a written contract, or $9K total.) I say “arguably” only because, to my knowledge, no court has yet ruled on this issue, which is one of statutory interpretation. However, the argument can be supported by the specific language of FIFA.
2. Why does the Freelance Isn’t Free Act work so well? Do you have any proof?
After FIFA was enacted, the NYC Department of Consumer and Worker Protection released a report on its effectiveness. The report found:
- 61% of people making claims under FIFA recovered payment within 91 days.
- The average claimant recovered $2,039.
- 72% of people making claims worked in the arts and entertainment industries.
3. Are there any other penalties under the Freelance Isn’t Free Act?
Yes. FIFA requires the hiring party to pay the freelancer’s attorney’s fees and costs for any successful claims.
This means, presuming you ultimately win your FIFA lawsuit, the company who hired you is obligated to also reimburse you for any money you pay to file your claim (such as a court filing fee) and anything you have to pay an attorney.
This is true regardless of the nature of the hiring party’s specific violation of FIFA.
There is another miscellaneous penalty under FIFA: FIFA punishes the worst companies for what are called “pattern and practice” violations.
A pattern and practice violation is when the same company is found to have repeatedly violated FIFA with numerous different freelancers. In these cases, FIFA allows the City to impose a $25,000 fine on repeat offender companies.
4. Could there be negative consequences to the freelancer for filing a claim?
Perhaps, though it is unlikely due to FIFA’s anti-retaliation and anti-blacklisting provisions.
Many freelancers are afraid of being blacklisted if they speak up about their unpaid invoices. But FIFA specifically forbids hiring parties from punishing freelancers for asserting non-payment claims.
Specifically, FIFA makes it illegal to “threaten, intimidate, discipline, harass, deny a work opportunity to or discriminate” against a freelancer or independent contractor who complains or even attempts to complain about non-payment.
Retaliating or even threatening to retaliate against a freelancer is a separate violation of FIFA that entitles the freelancer to additional damages.
Therefore, any hiring
parties who are foolish enough to attempt to retaliate against you for
exercising your rights will inevitably have to pay you more in the long run.
Section 3: How to File (and Win!) a Freelance Isn’t Free Act Claim.
Now for the meat and potatoes of why you’re here.
With FIFA’s assistance, freelancers have several options to collect their unpaid invoices. None of them is required, but they can all be effective tools to help you get paid.
In fact, when all of these acts are combined, the chances of you getting paid more than the unpaid amount of your original invoice greatly increase!
Option 1 – File an Administrative Complaint
Step 1 – File a complaint with the New York City Office of Labor Policy & Standards.
FIFA allows freelancers seeking payment for past work to file an administrative complaint with the Office of Labor Policy & Standards (“OLPS”).
The OLPS is governmental office within New York City government charged with investigating and enforcing alleged FIFA violations.
The OLPS complaint form can be submitted by email to [email protected]. It can also be mailed or faxed. There is no fee to file an OLPS complaint.
Pro Tip: Be sure to attach any supporting proof of your claim to your complaint. Examples may include a copy of your invoice, pictures showing the work was complete, emails asking for payment, or copies of a written contract, if one exists.
Including these materials will make it more likely you will win your claim.
Step 2 – Allow the OLPS to investigate.
Within twenty (20) days of receiving the complaint, the OLPS will forward it to the company or person who hired you. The hiring party has twenty (20) days to respond to the complaint and identify any reasons why the freelancer has not been paid in full.
If the hiring party responds, the OLPS must forward the response to the freelancer within twenty (20) days. If the hiring party fails to respond, the OLPS will send a “Notice of Non-Response” to both the hiring party and the freelancer by certified mail.
The freelancer can then use the Notice of Non-Response to flip the burden of proof to the hiring party in any lawsuit (see below for more info).
That is, the Notice of Non-Response creates a presumption in any lawsuit that the hiring party is guilty of whatever they were charged with in the complaint. The hiring party then has the burden to prove why they should not have to pay the invoice as opposed to the freelancer having to prove why the invoice should be paid. This is very, very powerful in court.
Step 3 – See what the OLPS decides.
The OLPS cannot force the hiring party to pay you. It also does not have the power to award double damages. Only a court can do that.
Regardless, the OLPS’s decision may be helpful in your lawsuit. The OLPS process is fairly quick and is usually over in less than 90 days. The OLPS process also forces the hiring party to defend itself.
So, for example, if the hiring party claims the freelancer’s services were incomplete or unsatisfactory, you will get to learn this before you spend the time filing a lawsuit.
Alternatively, the OLPS may find the hiring party has no reasonable excuse for its failure to pay you, which you can use as evidence in court.
Option 2 – Send a Demand Letter
A demand letter threatening a lawsuit or a FIFA complaint to the OLPS can be an effective way to get paid. A quality demand letter has the following characteristics:
- It is polite, professional, and does not include personal attacks.
- It includes proper grammar, punctuation, and spelling. These characteristics show you put a lot of thought into your letter.
- It is stern and shows the freelancer is serious about getting paid.
- It briefly recites the history between the parties.
- It includes essential details such as when the freelancer was hired, what work they performed, when payment was initially due, how much should have been paid, and the efforts already taken to try and obtain payment.
- It concludes with a firm demand for payment within a reasonable time period. If the time period is too short, the hiring party won’t have enough time to seriously evaluate the demand. If the time period is too long, the hiring party will likely procrastinate and not take the letter seriously.
- It threatens an OLPS complaint, a lawsuit, or both, if payment is not made in strict compliance with the terms of the letter.
Pro Tip 1: Avoid the temptation to be emotional in your demand letter.
Even though you may be hurting inside because you feel taken advantage of, use a strictly business tone in your letter. Avoiding emotional language increases the chance of getting the result you want.
Pro Tip 2: It is a good idea to send the demand letter by multiple methods, including email, regular mail, and certified mail. This will ensure the hiring party actually receives the letter and cannot later claim they did not get notice you were seeking payment.
The Freelancers Union also provides a good template for a demand letter.
Pro Tip 3: Demand letters sent by attorneys typically have a much higher success rate because recipients tend to take them more seriously. This is not to say that you won’t be successful writing and sending your own demand letter, but demands from non-attorneys are often, sadly, ignored.
Option 3 – File a Lawsuit for Non-Payment
Sending a demand letter is optional. So is filing the OLPS complaint.
If you file a lawsuit before filing an OLPS complaint, the OLPS will disregard your complaint and direct you back to the court.
However, if you file an OLPS complaint and wait for the OLPS to reach a decision on the complaint, you may file a lawsuit after the decision, regardless of what the decision actually ends up being.
Stated differently, even if the OLPS finds the hiring party had a valid excuse for failing to pay you, you can still file a lawsuit.
Pro Tip: Hire a lawyer before you file suit. Even a small claims lawsuit can entail strange procedures that a skilled lawyer can navigate on your behalf.
As Abraham Lincoln once famously said, “A person who represents himself has a fool for a client.”
The details matter in a lawsuit. An experienced lawyer will probably focus on details you may have overlooked.
Since successful FIFA claimants are legally entitled to recover their attorney’s fees, there is really no downside to working with a lawyer at this stage.
Also, statistically, claimants have a much higher success rate, collect more money, and do so more quickly if they hire a lawyer.
Step 1 – Determine what type of court in which to sue.
First, consult the “penalties” analysis above in “Section 2: Why is FIFA so Helpful to Getting Freelancers Paid?”
If you believe you are owed less than $10,000, you should file your lawsuit in NYC Small Claims Court.
If you believe you are owed between $10,000 and $25,000, including your recovery of double damages under FIFA, you must file your lawsuit in NYC Civil Court.
If you believe you are owed more than $25,000, you must file your lawsuit in New York “Supreme Court.” We typically file most of our cases in New York County Supreme Court, but every situation is unique.
Step 2 – Determine what county in which to sue.
As the plaintiff, you get to choose the lawsuit’s “venue,” meaning in which county you file suit.
Venue can be in the county in which either you or the hiring party resides or the county in which you did the work. It’s entirely your choice.
Pro Tip: If you have the option between multiple venues, pick the venue that is most convenient for yourself and most inconvenient for the defendant.
The available counties are New York County (Manhattan), Kings County (Brooklyn), Queens County (Queens), Bronx County (The Bronx), and Richmond County (Staten Island).
Step 3 – Draft a Statement of Claim.
Start with the Statement of Claim form. This form includes only the minimum amount of information you need to support your claim.
It is wise to include additional information such as the history between the parties, when you did the work, how much you are owed, how many times you attempted to obtain payment, etc.
If you sent a demand letter or filed an OLPS complaint before filing your lawsuit, you can recycle the information you used in these documents in your lawsuit. You might even attach these documents as exhibits to your Statement of Claim.
Step 4 – File your Statement of Claim.
File your statement of claim with the County Clerk for the county in which you are filing your lawsuit. The current locations for the different county clerks are:
- Bronx County – 851 Grand Concourse #124, Bronx, NY 10451; (718) 618-3300; https://iapps.courts.state.ny.us/ctclrk/home
- New York County – 60 Centre Street Room 161, New York, NY 10007; (646) 386-5955; https://www.nycourts.gov/courts/1jd/supctmanh/county_clerk_operations.shtml
- Kings County – 360 Adams Street, Room 189, Brooklyn, NY 11201; (347) 404-9772; https://www.nycourts.gov/courts/2jd/kingsclerk/
- Queens County – Queens Supreme Court Building, 88-11 Sutphin Boulevard Jamaica, NY 11435; Executive Office Room 105; General Office Room 106; http://nycourts.gov/COURTS/11jd/queensclerk/index.shtml
- Richmond County – 130 Stuyvesant Place, 2nd Floor, Staten Island, NY 10301 (718) 675-7700; http://www.richmondcountyclerk.com/information.htm
It will cost $15-20 to file the Statement of Claim. This is considered a litigation “cost,” and you can ask the judge to reimburse you for the cost at your hearing.
The Statement of Claim can also be filed online with a third-party service called TurboCourt. TurboCourt requires you to set up an account with a username and password.
Many people find it easier to file online, but others prefer to file documents in person with the court clerk to ensure the document is properly filed.
Step 5 – Have the defendant served.
It’s critical that the defendant receive notice of the lawsuit. You may have to pay an additional fee for proper service, but this is also a litigation cost that can be recouped later.
The court clerk can help you ensure the defendant is properly served. Usually, the clerk will mail a certified copy of the Statement of Claim to the defendant.
If the defendant cannot be served by mail, the clerk will inform you, and you have to either hire a process server or have someone other than yourself personally serve the defendant.
Now you’re off to the races!
Step 6 – Obtain a hearing date and prepare for trial.
If you need help obtaining a trial date, call the court clerk and ask what the proper procedure is to obtain a date.
You may want to conduct “discovery” before the hearing.
Discovery is when you request documents or information from the defendant, which they may be obligated by law to provide. Hopefully, you already have all the documents you need, since conducting discovery takes time and slows down the process before your hearing.
You may need to file a motion before your hearing. A motion is simply a request for the court do something. The Small Claims Forms page is a good starting resource.
An example of a common motion is a “motion to adjourn” (also called a motion for continuance). You might make a motion to adjourn if you feel you need more time to properly prepare for the trial. Courts will often grant the initial request to adjourn.
Step 7 – Conduct the trial.
On the day of trial, be “Quadruple-P,” which means Polite, Professional, Prepared, and Persistent.
Have all your documents and proof in order and ready to present. Have copies ready for the defendant and the judge.
The most prepared litigant is the winner more often than not.
Prepare an outline of questions you may want to ask of the defendant. If you think the defendant is going to make a particular defense, be prepared to poke holes in that defense and show why it is not persuasive.
Here is an example of a potential defense and how to combat it:
What if the defendant says they should not have to pay because your work was not good? Make them admit they used or relied on the work. Or, make them admit they did not complain about the quality of the work after you sent your invoice. This will cast doubt on their credibility.
If you need witnesses, be sure they show up on your behalf. Coordinate with them beforehand so they know the date and time of the hearing.
Prepare an opening statement that will summarize your view of the lawsuit and what you will prove to the judge when you present your evidence.
Prepare a closing statement that will remind the judge of the most important evidence and request a specific sum of money. Ask for “judgment” against the defendant.
Step 7 ½ – Either before or after trial, see if you can settle the case.
It’s possible the defendant will ask you to settle the lawsuit before or even during trial. If this happens, you are free to settle the lawsuit on any terms that are acceptable to you.
Settlements typically include payment by the defendant in exchange for dismissing the lawsuit and your promise not to sue over the same issue again in the future. They might include other terms, such as confidentiality and non-disparagement (i.e., an agreement not to badmouth each other when the case is over).
Pro Tip 1: Don’t be greedy. Money today is worth more than possible money in the future. I’m reminded of the phrase, “one in the hand is worth two in the bush.”
Even though you might be legally entitled to double your unpaid invoice under FIFA, if the defendant offers enough money to fully cover your unpaid invoice, all your court costs, and a little bit of interest, you would be wise to accept the deal.
Even if you’re nearly certain you will win, settling eliminates the uncertainty over whether you can successfully collect after trial.
Pro Tip 2: If you are close to settling, do not dismiss your lawsuit until you have received payment from the defendant. The existence of the lawsuit is your leverage to ensure the defendant will pay.
Step 8 – If you win, work with the sheriff or marshal to collect payment.
If you win, the court will issue a “Notice of Judgment” and mail it to both you and the defendant. This is the critical piece of paper that carries the force of law and obligates the defendant to pay you the amount of the judgment.
The judgment may include interest, so the longer it remains unpaid, the more you are owed.
By now, the defendant would be wise to just pay the judgment. Try calling, emailing, or mailing them again giving them one last chance to pay within a short, but reasonable deadline.
If they still refuse to pay, you cannot put them in jail, but you can seek an “execution.”
An execution is where the sheriff or marshal literally goes to the defendant’s office or place of business and takes money or property in order to satisfy your judgment.
There are other legal steps and potential mechanisms to collecting a judgment, but they are outside the scope of this guide.
Finally, please be sure to check out additional resources at the Freelancers Hub.
Section 4: Conclusions
I hope you found this comprehensive guide to the Freelance Isn’t Free Act helpful. FIFA is an extraordinary law that gives power back to working people.
I would be grateful if you shared this guide with all of your freelancing friends. Together, we can stop freelance payment abuses in New York City and elsewhere.
Above all, work hard, be respectful and professional, and good things will come your way.
But, if someone tries to take advantage of you, follow the sage wisdom of Carole King, who once said:
Now, ain’t it good to know that you’ve got a friend
When people can be so cold?
They’ll hurt you, yes, and desert you
And take your soul if you let them,
Oh, but don’t you let them.
Know your worth. You are valuable and you deserve payment for your hard work.
Please feel free to email me or call me at (646) 568-4280 if you have any questions or would like to know anything more about enforcing your freelance and independent contractor rights within New York City.