A new ordinance in Los Angeles County that became effective July 1^st of this year requires a written contract between hiring entities and freelance workers. The Freelance Worker Protections Ordinance aims to ensure freelance workers are treated fairly and receive the compensation they are due. This ordinance applies to work performed by Freelance Workers for Hiring Parties (i) within the confines of the City of Los Angeles (ii) pursuant to either written or oral contract entered into on or after July 1, 2023, and (iii) which has an individual or aggregate value, in a calendar year, of at least $600.

The ordinance requires a very basic written contract, which must include: (i) name, mailing address, phone number, and, if available, email address of both the hiring entity and the freelance worker; (ii) an itemization of all services to be provided by the freelance worker, the value of the services to be provided, and the rate and method of compensation; and (iii) the date for payment or the manner by which such date will be determined. Additionally, the hiring entity must provide full payment to the freelance worker on or before the date specified in the written contract or, if the written contract does not specify a due date or if there is no written contract, no later than 30 calendar days after services are rendered. Furthermore, the Ordinance requires both the hiring entity, and the freelance worker must each retain written records related to this ordinance for at least four years, including contracts, payment records, and any other written or electronic records to demonstrate compliance.

The term “freelance worker” includes any individual or entity, itself having no employees, hired as an independent contractor to provide services in exchange for compensation. A “Hiring Entity” means an entity regularly engaged in business or commercial activity. Therefore, any business hiring independent contractors in Los Angeles County should be aware of and follow the ordinance’s guidelines accordingly.

Furthermore, the ordinance prohibits hiring entities from punishing, penalizing, retaliating, or taking any adverse employment action against them for exercising their rights. These rights include the ability to file a civil lawsuit seeking damages for violations and/or filing a complaint with the Bureau of Contract Administration, Office of Wage Standards (OWS) within one year of the alleged violation. In addition, even if the Freelance Worker files an administrative complaint, they can still sue the Hiring Entity. If the Freelance Worker sues and prevails, the Court is required to award certain damages depending on the nature of the violation. However, in all instances, a prevailing Freelance Worker is entitled to (i) their reasonable attorneys’ fees and costs, (ii) injunctive relief if requested, and (iii) any other remedies deemed appropriate by the Court. If, prior to commencing work, the Freelance Worker requested and was refused a written contract, the Freelance Worker must be awarded the sum of $250. Any waiver by a freelance worker of any provision of this ordinance is deemed contrary to public policy and is void and unenforceable.

In conclusion, when contracting with freelance workers in Los Angeles County, businesses should review the requirements of this ordinance carefully to avoid fees and further legal recourse.