On Aug. 7, 2024, the City of Los Angeles unveiled its “Model Contract” under the Freelance Worker Protections Ordinance (FWPO). This ordinance, which took effect on July 1, 2023, was designed to bolster protections for freelance workers in Los Angeles.
Ensure Compliance
Before using the Model Contract provided under the FWPO, entities engaging freelance workers must first ensure compliance with California Labor Code Section 2775 et seq., which governs the classification of workers as independent contractors. Compliance with California’s state statutes takes precedence, as misclassification can result in significant legal and financial consequences. Once a hiring entity, in consultation with its attorneys, has confirmed that its worker classification aligns with the requirements of Section 2775 et seq., the Model Contract can be adapted to address the specific needs of the engagement while maintaining compliance with both state and local regulations.
What Is the Freelance Worker Protections Ordinance?
The FWPO provides specific requirements for engaging freelance workers in Los Angeles.
Who is covered? The ordinance applies to freelance workers—individuals or single-person entities—who are hired by a business or commercial entity (excluding those hiring app-based drivers) to provide services in exchange for compensation.
What work is covered? The FWPO covers work performed by a freelance worker within Los Angeles when the work is valued at $600 or more, whether for an individual job or cumulative jobs within a calendar year.
Protections provided:
- Written contracts are required for all agreements valued at $600 or more.
- Full payment must be made by the date specified in the contract, or within 30 days after work completion if no date is specified.
- Both parties must retain records for four years.
- Retaliation against freelance workers for exercising their rights is prohibited.
Reporting violations: Freelance workers can file a complaint with the Los Angeles Bureau of Contract Administration’s Office of Wage Standards. Alternatively, they may pursue civil action in court. Complaints must be submitted within one year of the alleged violation.
Consequences for violations: If a hiring party violates the ordinance, a court may award the freelance worker damages, including twice the unpaid amount, attorney fees, and other remedies. Additionally, if the hiring party fails to provide a requested written contract, the freelancer may receive an extra $250.
The Model Contract: A Blueprint for Compliance
The Model Contract published by the city serves as a basic template to help businesses and freelancers comply with the FWPO. While not legally required, it provides a framework for drafting contracts that meet the ordinance’s requirements. The Model Contract includes essential elements such as:
- Scope of work: Clearly defines the services to be provided, including deliverables, timelines, and locations of where the work will be performed.
- Payment terms: Outlines payment amounts and schedules while ensuring compliance with the ordinance’s 30-day payment rule.
The release of the Model Contract offers a guide for ensuring compliance with the FWPO. Businesses that regularly engage freelancers should review their current contracts and practices to ensure they align with the ordinance’s requirements. But while the Model Contract serves as a foundation to develop a standardized agreement, it is essential to customize any contract to reflect the specific needs of each engagement and to consult legal counsel to address additional terms and needs that may arise.
Conclusion
The publication of the Model Contract provides a helpful blueprint for compliant contract terms under Los Angeles’ FWPO. Businesses should take immediate action to familiarize themselves with the Model Contract and ensure their practices are in line with the ordinance.
The Office of Wage Standards website provides more information and has a sample Model Contract.
Blair C. Senesi is an attorney with Littler in San Francisco. Jaime B. Laurent is an attorney with Littler in Los Angeles. © 2024 Littler. All rights reserved. Reposted with permission.
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