Los Angeles, CA: New Rules for Individual Independent Contractors

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APPLIES TO

All Businesses with Individual Independent Contractors in Los Angeles, CA

EFFECTIVE

July 1, 2023

  

QUESTIONS?

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(888) 378-2456
Quick Look

  • Individual independent contractors in the city of Los Angeles must have written agreements with their hiring entities.
  • Hiring entities also have pay timing, recordkeeping, and anti-discrimination requirements.

Discussion

The Freelance Worker Protection Ordinance requires all businesses with freelance workers in the city of Los Angeles to have a written contract for their services. A freelance worker is an individual who is a bona fide independent contractor. The rules do not apply to freelance workers:

  • That are already required to have a written agreement for services in exchange for compensation;
  • That are already an employee of the hiring entity;
  • That agree to perform work for no pay; and
  • Of an entity that has employees other than the one individual person who is the sole legal and beneficial owner.

The rules also do not apply to entities hiring app-based transportation and delivery drivers to provide prearranged services.

Written contracts are required when there is a written or oral contract with a freelance worker that is entered into on or after July 1, 2023, if the freelance worker is entitled to $600 or more in a calendar year, either in one agreement or in the aggregate, for the same hiring entity. The contract must state: (1) the name, mailing address, phone number, and email address of both the hiring entity and the freelance worker; (2) an itemization of all services to be provided by the freelance worker, the value of the services to be provided pursuant to the contract, and the rate and method of compensation; and (3) the date by which the hiring entity must pay the contracted compensation or the manner by which such date will be determined.

There are additional requirements on hiring entities, including timely payment of contracted compensation (no later than 30 days after performed services if timing is not stated in the contract); record retention for four years of all contracts, payment records, and any other written or electronic records demonstrating compliance with the Ordinance; and no discrimination or retaliation against any freelance worker complying with or asserting their rights under the Ordinance. Freelance workers cannot waive their rights under the Ordinance.

Failure to pay required wages results in damages up to twice the amount that remains unpaid under the contract. Failure to provide a contract when requested at the outset by the freelance worker results in an additional $250 in damages. If the hiring entity violates the Ordinance in any other way, the freelance worker may recover damages equal to the value of the contract or the work performed, whichever is greater. A successful claim may also result in recovery of attorneys’ fees and costs from the hiring entity.

Action Items

  1. Review the Ordinance here.
  2. Have written agreements for freelance workers in Los Angeles prepared by legal counsel for compliance.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase