What is the California Freelance Worker Protection Act?
Whether you’re hiring freelancers or are a freelancer yourself, you should be aware of California’s new Freelance Worker Protection Act (FWPA). The FWPA applies to a wide range of freelance workers and has important implications for the hiring and payment practices of any industry, like production, that relies heavily on freelancers.
OOTB has updated our processes to support compliance with the FWPA’s requirements for contracting and timely payments. This protects our clients and guarantees accurate contracts and on-time payments for the ICs we pay on their behalf.
What is the Freelance Worker Protection Act?
The Freelance Worker Protection Act, or Senate Bill 988, is a California law that mandates certain requirements to protect workers who are classified as independent contractors (ICs). The FWPA went into effect on January 1, 2025, and applies to any freelance worker who is hired as an independent contractor to provide professional services in exchange for $250 or more of compensation. The $250 threshold applies to either a one-time engagement or multiple engagements between the same client and IC in the preceding 120 days.
There are limited exceptions for ICs engaged by the California state, federal, or foreign governments or hired by individuals to perform services that personally benefit themselves or their family members. The law also applies to ICs who live outside of California but work for clients who do.
What are the Requirements of the Freelance Worker Protection Act?
The FWPA mandates the following requirements:
ICs must receive a written contract.
The client must give the IC a signed copy of the contract and retain their own copies for a minimum of four years.
The names and addresses of both the IC and the client.
An itemized list of all services to be provided by the IC, including the value of those services.
The rate and method of compensation.
The date when the IC will be paid.
The deadline for the IC to provide a summary of services performed (e.g., an invoice) to the client.
ICs must be paid on or before the date specified in the contract.
If no date is specified, the default deadline is 30 days after the completion of services.
Once the IC has begun to perform the services outlined in the contract, the client is prohibited from requiring the IC to accept lower compensation, provide additional services, or grant more intellectual property rights as a condition of timely payment.
The client is prohibited from discriminating or retaliating against an IC who seeks to assert their rights as outlined in the FWPA.
What are the Penalties for FWPA Violations?
The FWPA empowers ICs to file a civil action against businesses that fail to comply with these requirements, and those businesses can face serious penalties, in addition to being responsible for attorney fees and costs:
If an IC is denied a written contract, they will be awarded an additional $1,000.
If an IC is paid late, they can demand up to double the contracted amount of compensation.
If a business violates any other part of the FWPA, the IC can be awarded damages equal to the value of the contract or work performed.
The FWPA’s requirements will hopefully promote more clarity in relationships between businesses and freelancers and, in the long run, make the production industry stronger and more efficient. To ensure compliance with the FWPA, all businesses and freelancers should insist on clear contracts, track payment deadlines, and keep records of all signed contracts, proof of payment, and documentation of any changes in the scope of contracted work.
Sources:
California Legislative Information: Senate Bill 988 Freelance Worker Protection Act
California Department of Industrial Relations: Independent Contractor vs. Employee FAQs
Disclaimer:
The information provided on this page is for general informational purposes only and does not constitute legal advice.