NYC passes first proposal to guarantee contractors' pay
- The New York City Council is set to vote on a wage-saving measure that protects independent contractors, Politico reports. The proposal, known as the Freelance Isn’t Free Act, requires companies to draft written agreements detailing independent workers’ responsibilities, expectations and pay rates. Contractors must be paid within 30 days of a date agreed on by both parties. City contractors, however, are exempt from the measure.
- New York is the first state to adopt a measure that guarantees contractors their pay. The state’s Office of Labor Standards director will step in if a business persists on not paying. A Freelancers Union survey shows that 70% of contractors get “stiffed” at some point in their careers and that the cost of losing out on pay is $6,000.
- The U.S. Government Accountability Office counts independent contractors among contingency workers, who now make up 40.4% of the workforce. GAO statistics show independent contractors as 10% of all U.S. workers.
Depending on the vote’s outcome, contractors could now have legal contracts that can be tracked and used as proof against companies that fail to pay them promptly. Companies that refuse to do so could end up shelling out more money in back wages, penalties, attorney’s fees and fines.
Contractors are one of the fast-growing segments of workers. Companies looking to keep hiring and benefits costs down will likely need contractors to take on some of the work full-time employees can’t do. HR must ensure they are part of the contingent hiring plan, however, as some companies leave HR out of the loop when temporary hiring is necessary.