The California Governor recently signed Senate Bill (SB) 988, which establishes the Freelance Worker Protection Act (Act) which imposes minimum requirements relating to contracts between a hiring party and a freelance worker.
Under the new law, “freelance worker” is defined as a person or organization composed of no more than one person, whether or not incorporated or employing a trade name, that is hired or retained as a bona fide independent contractor by the hiring party to provide professional services in exchange for an amount equal to or greater than $250. The Act only applies to freelance-style services listed in California Labor Code Section 2778(b)(2).
Under the law, an agreement between a hiring party and a freelance worker must be in writing and include the following:
- Names and addresses of both parties.
- An itemized list of services, their value, and the compensation method.
- Payment due dates or mechanisms for determining them.
- Due dates the freelance worker to report completed services for processing timely payment.
Once a freelance worker has commenced providing services a hiring entity is prohibited from requiring the worker to accept less compensation or provide more services than previously agreed in order to receive timely payment.
The law always puts in place certain prohibitions against retaliatory actions by hiring entities for a freelance worker taking any of the following actions:
- Opposing any practice prohibited by the Act
- Participating in proceedings related to the enforcement of the Act
- Seeking to enforce rights under the Act
The Act applies to contracts entered into or renewed on or after January 1, 2025.
