With the stated purpose of providing protection to freelance workers who may struggle to receive timely and full payment for their services, the city of Los Angeles has established an ordinance which will require hiring entities to have a written contract with any freelance worker for services valued at $600 or more in a calendar year.  Titled the “Freelance Worker Protections Ordinance”, the legislation establishes specific rights and remedies for freelance workers which could prove costly to uninformed employers. 

As defined by the ordinance, a “hiring entity” is any entity that is engaged in business or commercial activity.  A “freelance worker” is an individual person or entity, whose work is performed by no more than one person, that has no other employees, and that is not required by other law to have a written agreement to perform services in exchange for compensation.  For any contract entered into after July 1, 2023, that will entitle the freelance worker to $600 or more from the hiring entity, including any prior written or oral contracts in a calendar year, a written contract is required. 

The written contract must include the name, mailing address, phone number and email address of both the hiring entity and the freelance worker.  The contract must itemize all of the services to be provided by the freelance worker, set forth the value of the services and the rate and method of compensation.  In addition, the date by which the hiring entity must pay or the manner by which such date will be determined must be stated in the agreement.  The ordinance also requires the hiring entity to make full payment on or before the date specified in the written contract or, in the absence of a specific date or written contract, by no later than 30 days after the services are rendered.

The hiring entity is prohibited from discriminating or taking any adverse action against a freelance worker who seeks to enforce his or her rights under the ordinance.  Freelance workers may file a civil action to enforce the ordinance and recover damages or file a complaint with the Office of Wage Standards of the Bureau of Contract Administration within the Department of Public Works.  A freelance worker that requests a written contract and is refused by the hiring entity is entitled to an award of $250.  The failure to pay a freelance worker will result in the worker being awarded up to twice about the amount that remains unpaid under the contract.  Any other violation of the ordinance can result in award equal to the value of the contract, or the work performed, whichever is greater.  In addition, a freelance worker that prevails on a claim under the ordinance is entitled to reasonable attorneys fees and costs, injunctive relief, and any other remedy deemed appropriate by the court.

The ordinance requires both the hiring entity and freelance worker to maintain all records relating to compliance for no less than four years.  It should be noted that there is no way to contract around the requirements of the ordinance; the ordinance states that any waiver shall be deemed contrary to public policy, void and unenforceable.

Employers in the city of Los Angeles may ponder the need for such an ordinance, given the already heavily regulated requirements for establishing independent contractor relationships, as well as the remedies previously available to contractors who feel wronged.  Regardless, the Freelance Worker Protections Ordinance is representative of the current trend of cities and counties becoming more active in establishing requirements for employees and contractors which are in addition to those existing at the state or federal level.  As these changes tend to happen quickly with little or no publicity, employers should be careful to regularly update employment and contractor practices with the assistance of experienced employment counsel.