Richard J. Reibstein, a partner in Pepper Hamilton's Labor and Employment Practice Group and a co-chair of the firm's Independent Contractor Misclassification and Compliance Practice Group, was quoted in the May 15, 2017 Bloomberg BNA article, "NYC Freelancers Due Contracts, Timely Pay."
Hiring parties should take “self-help measures” to address their potential exposure under the Freelance Isn’t Free Act by making precautionary language standard in their written contracts, Richard J. Reibstein, an attorney with Pepper Hamilton LLP in New York who advises management on employment matters, told Bloomberg BNA.
The anti-retaliation provision should be addressed in the contract by terms that neither party has any obligation to continue the work relationship after completion of the engagement or to consider the other party for future services, Reibstein said. Hiring parties should also take care to structure, document and implement their freelancer relationships in a way that enhances compliance with federal, state and local laws governing independent contractors.
Reibstein said May 9 that numerous questions remain about the terms of the law.
“There are many positive aspects of this law, but it does need considerable tweaking to make it evenhanded and provide greater clarity to the contracting parties,” he told Bloomberg BNA.
Among the uncertainties are what connections to New York City are needed to invoke the law’s coverage, whether a complaining worker is truly an independent contractor, how the hiring party will know of that status and what will constitute satisfactorily completed work, Reibstein said.
He also said the law should explicitly afford hiring parties a good-faith defense like those available in state and federal labor standards laws.
Many of the questions of the parameters of coverage, standing, jurisdiction and interpretation will be decided by the courts, he said, but “that’s years down the road.”
It’s common in freelance arrangements to pay an independent contractor only after receiving an invoice or statement of completion of the work, but the new law lacks such a requirement, Reibstein said. “That alone would eliminate most disputes,” he said.
The law’s anti-retaliation provision, with a six-year statute of limitations, may be “the scariest part,” Reibstein said. Retaliation might consist of just telling the freelancer that “we won’t be working together again,” he said.
Even if the hiring party clearly states that poor work quality is the reason the freelancer won’t be getting more assignments, that could be challenged as a pretext and become the subject of time-consuming factual discovery, Reibstein said.
The remaining uncertainties should be addressed through regulatory steps by the city and statutory changes by the City Council, Reibstein said, noting that the law calls for the city to report to the council on the its implementation after a year has passed.
Mr. Reibstein co-publishes a legal blog dedicated to independent contractor misclassification and compliance, including a monthly update of judicial, administrative, and legislative developments in the area.