The City of Los Angeles has taken a significant step to safeguard the rights of freelance workers with the implementation of a new ordinance. The ordinance, known as Ordinance No. 187782, aims to address the unique challenges faced by freelance workers and provide them with essential protections. Recognizing the vital role played by freelancers in today's economy, the City of Los Angeles seeks to ensure fair treatment and proper compensation for these independent contractors.

Protecting Freelance Workers:

Ordinance No. 187782, established under Article 10 of Chapter XVIII of the Los Angeles Municipal Code, aims to rectify the disparity in protections between freelance workers and traditional employees. Freelancers, who are often classified as independent contractors, face various challenges such as delayed payments, non-payment, and less-than-full payment for their services. The ordinance acknowledges the need for fair treatment and compensation for freelance workers.

Definition of Terms:

1. Freelance Worker: A "Freelance Worker" refers to an individual natural person or an entity whose legal and beneficial interests are held entirely and whose work is performed entirely by no more than one individual natural person. They are hired or engaged as a bona fide independent contractor to perform services for a Hiring Entity in exchange for compensation. However, Freelance Workers do not include individuals or entities required by law to have a written agreement for services, those who are employees of the Hiring Entity, those who work for no pay, or those who have employees other than the individual natural person who is the sole owner.
2. Hiring Entity: A "Hiring Entity" refers to an entity regularly engaged in business or commercial activity. It includes entities that own or operate any trade or business, including not-for-profit businesses, or represent themselves as engaging in any trade or business. However, the term "Hiring Entity" excludes entities that hire app-based transportation and delivery drivers to provide prearranged services.

Key Provisions of Ordinance No. 187782:

1. Purpose: The ordinance highlights the importance of freelance workers in the economy and the need to provide them with the same protections against wage theft as employees.
2. Application: The ordinance applies to contracts entered into on or after July 1, 2023, between a Freelance Worker and a Hiring Entity, where the work performed within the City entitles the Freelance Worker to payment of $600 or more in a calendar year.
3. Written Contract Requirement: Any contract valued at $600 or more between a Hiring Entity and a Freelance Worker must be in writing, including essential information such as the names, addresses, services to be provided, compensation details, and payment due dates.
4. Timely Payment: The ordinance mandates that Hiring Entities must provide full payment to Freelance Workers by the date specified in the written contract or within 30 calendar days if no specific due date is mentioned.
5. Recordkeeping: Both Hiring Entities and Freelance Workers must retain written records related to the ordinance, including contracts and payment records, for a minimum of four years.
6. Retaliatory Action Prohibited: The ordinance strictly prohibits Hiring Entities from discriminating against Freelance Workers or taking adverse action against them for asserting their rights under the ordinance.

Enforcement and Remedies:

Freelance Workers are empowered to report violations of the ordinance to the Designated Administrative Agency ("DAA") or file a civil action for damages. The DAA is responsible for receiving complaints, contacting Hiring Entities for information, and assisting Freelance Workers throughout the process. Freelance Workers who prevail in their claims may be entitled to damages, reasonable attorney's fees and costs, injunctive relief, and other appropriate remedies as determined by the court.

Conclusion:

In a significant move to protect freelance workers, the City of Los Angeles has implemented Ordinance No. 187782, also known as the Freelance Worker Protections Ordinance. This ordinance recognizes the challenges faced by freelance workers and aims to ensure fair treatment and proper compensation for these independent contractors. It defines a "Freelance Worker" as an individual or entity hired as an independent contractor and a "Hiring Entity" as an entity engaged in business or commercial activity. The ordinance requires written contracts for contracts valued at $600 or more, timely payment, recordkeeping, and prohibits retaliatory actions against Freelance Workers. Enforcement and remedies are available through the DAA or civil actions. The implementation of this ordinance demonstrates the city's commitment to upholding the rights of freelance workers and promoting a more equitable working environment.

If you have any questions regarding your company's policies or need guidance on California employment law, contact the Law Office of Catherine Chukwueke and schedule a consultation. We are here to help you navigate the complexities of employment law with confidence.

Disclaimer: This article has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.