In September 2024, California passed the Freelance Worker Protection Act (FWPA), which is slated to come into effect in January 2025.
This law, often referred to as the “Freelance Isn’t Free” law, is a big deal for anyone hiring freelancers, particularly in the event production space where freelance labor is key. If you're a labor buyer at a production company, this law should be on your radar, especially if you work with independent contractors regularly.
What is the FWPA?
The FWPA introduces several important protections for freelancers to ensure they get paid on time and are treated fairly. Here’s a quick breakdown:
Mandatory Contracts: For any freelance gig worth $250 or more (whether it’s from one job or over four months), you’ll need to provide a written contract. This contract should include all the essentials—scope of work, deadlines, payment terms, etc. This protects both you and the freelancer by setting clear expectations from the start.
Timely Payments: Freelancers must be paid within 30 days of completing their work unless the contract states otherwise. No more leaving freelancers in the dark about when their check is coming.
Anti-Retaliation Protections: If freelancers assert their rights under this law, they’re protected from retaliation. That means you can’t penalize them or refuse to hire them again just because they demanded payment.
Double Damages: If a freelancer doesn’t get paid on time, they can claim double the unpaid amount in damages, plus any legal fees. This adds a real sense of urgency for businesses to pay freelancers on time.
How Can You Prepare?
If you're managing a lot of freelance labor, this law might sound like a headache. But there are simple ways to stay ahead of it. First off, review your freelance contracts to make sure they're up to snuff. If you don't have formal contracts in place, now's the time to start. Trust me, the last thing you want is to get hit with double damages because you didn’t provide clear terms upfront.
Secondly, labor brokers can be a lifesaver here. They can handle a lot of the heavy lifting when it comes to compliance. Here’s why:
Can Labor Brokers Help with FWPA Compliance?
Absolutely, and they probably should be part of your strategy going forward. Labor brokers can step in to make sure you're staying compliant with the FWPA, while also saving you time and reducing risk. Here’s how:
Contract Management: Brokers manage all the legal paperwork, ensuring that every freelancer you hire has a proper, compliant contract. This keeps everything above board and protects you from disputes down the road.
Timely Payments: The FWPA requires payments within 30 days, and labor brokers handle this seamlessly. With their payroll services, you won’t have to worry about missing deadlines or dealing with the fallout from late payments.
Liability Protection: Labor brokers can act as the employer of record, which transfers a lot of the legal responsibility off your plate. They deal with taxes, workers' comp, and other legal requirements, ensuring you don’t run into compliance issues.
Anti-Retaliation Compliance: Labor brokers also manage any disputes that arise, shielding you from direct involvement in sensitive issues like claims of retaliation. This helps protect your relationships with freelance workers while maintaining legal compliance.
Wrapping It Up
The Freelance Worker Protection Act is here to shake things up, especially for companies that rely on freelance labor. But by staying ahead of the game—making sure your contracts are solid, payments are timely, and considering the use of labor brokers — you can continue to run your business without unnecessary risks.
In short: It’s not about avoiding the new rules; it’s about embracing them while protecting yourself. Partnering with a labor broker is probably one of the smartest moves you can make to ensure you're compliant and keep everything running smoothly. Plus, it’s way less stressful than navigating the intricacies of the FWPA on your own.
If you have questions or comments, feel free to reach out to brandon@xtracrew.net. Here are some other resources for you to reference and get more details:
California Senate Bill
Downloadable PDF:
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