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Los Angeles’ New Ordinance Sets A Fair Play Standard For Freelance Workers

In a significant stride towards enhancing the rights and protections of freelance workers, the city of Los Angeles, California, has enacted a groundbreaking ordinance poised to redefine the landscape for independent contractors in the city. The Freelance Worker Protections Ordinance, which took effect on July 1st, 2023, is a resounding win for freelance workers and is aligned with the city’s commitment to ensuring fair treatment and equitable compensation for all workers.

Defining Freelance Workers

Under the new ordinance, the term “freelance worker” has been meticulously defined, encompassing individuals and entities engaged as independent contractors to provide services in exchange for compensation. The ordinance explicitly excludes certain professions requiring written compensation agreements, such as attorneys, architects, and engineers. Similarly, app-based transportation and delivery drivers, who have been the subject of much debate in recent times, are also exempt from the scope of this ordinance.

At its core, the ordinance aims to establish fundamental rights and safeguards for freelance workers in Los Angeles. The following are key provisions that promise to reshape the freelancer landscape in the city:

  1. Basic written contract requirement: The ordinance mandates that a basic written contract between the freelance workers and the hiring entity must be in place. Even in cases where an oral contract exists, the hiring entity must provide a written contract. This contract must detail essential information, including contact details of both parties, services provided, compensation terms, and payment schedule.
  2. Timely payment assurance: The ordinance sets a clear standard for timely payment. If the contract specifies a payment date, the hiring entity must fulfill the payment in full by that date. In cases where no specific date is mentioned, payment must be issued no later than 30 days after completion of the work.
  3. Record keeping: Freelance workers and hiring entities must maintain written records for at least four years. These records must include contracts, payment documentation, and other evidence demonstrating adherence to the contract terms.
  4. Protection from retaliation: The ordinance safeguards freelancers from any form of punishment, retaliation, or adverse action by the hiring entity in response to exercising their rights under the law.
  5. Addressing violations: Freelancers are empowered to take action against violations. They can file a civil lawsuit seeking damages or file a complaint with the Bureau of Contract Administration. The ordinance affirms their right to pursue both avenues.
  6. Accountability for hiring entities: The ordinance outlines the responsibilities of hiring entities to respond to complaints and requests from the Bureau of Contract Administration. Failure to comply within the stipulated time frame can result in legal repercussions.
  7. Damages and remedies: Successful freelance worker litigants are entitled to a range of damages, depending on the nature of the violation. These include reasonable attorneys’ fees, injunctive relief, and other remedies deemed appropriate by the court.

Diving Deeper Into The New Ordinance

Los Angeles’ Freelance Worker Protections Ordinance transcends mere regulation, a testament to the city’s commitment to fostering a fair and equitable work environment for all. With a wide application encompassing many businesses and freelance workers, its significance cannot be underestimated. The ordinance underscores the need for companies to be proactive in reviewing their practices, ensuring compliance with its provisions, and upholding the rights and dignity of freelance workers.

This ordinance sets a powerful precedent for other jurisdictions in an age where the freelance economy is rapidly evolving. It signals a paradigm shift towards recognizing the vital contributions of freelance workers and valuing their rights on par with traditional employees. Los Angeles’ stride towards worker empowerment is not just commendable, it’s a blueprint for a more inclusive and just future of work.

Partner With A PEO

Amidst the transformative landscape shaped by Los Angeles’ pioneering Freelance Workers Protections Ordinance, businesses should consider partnering with a professional employer organization (PEO). PEOs like Group Management Services (GMS) specialize in providing comprehensive HR solutions, ensuring compliance with ever-evolving labor regulations. Businesses can streamline their administrative processes by partnering with GMS, efficiently manage freelance worker contracts, and maintain meticulous records.

As the ordinance ushers in a new era of freelancer empowerment, a PEO can serve as a strategic partner, helping businesses navigate the complexities and intricacies of the regulation while fostering an environment where freelance workers and hiring entities thrive harmoniously. With GMS’ expertise, businesses can confidently embrace the spirit of the ordinance and build a foundation of fairness, transparency, and compliance in their freelance engagements. Contact us today to learn more.