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Freelance workers in the City of Los Angeles received more protections with the Los Angeles City Council’s adoption on February 24, 2023 of Ordinance 187782 which is intended to protect the Freelance industry. The new law became effective on July 1, 2023 and employers must now comply with the provisions of this ordinance.

The Ordinance defines a Freelance Worker as “an individual natural person, or an entity whose legal and beneficial interests are held entirely and whose work is performed entirely by no more than one individual natural person, hired or engaged as a bona fide independent contractor to perform services for a Hiring Entity in exchange for compensation” with some exceptions to this definition.

And a Hiring Entity is defined as “means an entity regularly engaged in business or commercial activity. A hiring entity is regularly engaged in business or commercial activity if the hiring entity owns or operates any trade or business, including a not for profit business, or represents itself as engaging in any trade, or business. A “Hiring Entity” does not include an entity that hires app-based transportation and delivery drivers to provide prearranged services.”

And the provisions of this new Ordinance apply to “a written or oral contract between a Freelance Worker and a Hiring Entity entered into on or after July 1,2023; and to work performed within the City by a Freelance Worker that is entitled to payment of $600 or more in a calendar year for the same Hiring Entity.

If the Freelance Worker and the Hiring Entity fall under the provisions of this Ordinance, they must have a written agreement that includes, at a minimum, all of the following information:

– – The name, mailing address, phone number, and, if available, email address of both the Hiring Entity and the Freelance Worker;
– – 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
– – The date by which the hiring entity must pay the contracted compensation or the manner by which such date will be determined.

A 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.

A Hiring Entity and Freelance Worker shall each retain written records related to this article for no less than four years, including contracts, payment records, and any other written or electronic records to demonstrate compliance.

A waiver by a Freelance Worker of any provision in this article shall be deemed contrary to public policy and shall be void and unenforceable.

A Freelance Worker may either file a civil action for violations under this Ordinance, or file a complaint with the Office of Wage Standards of the Bureau of Contract Administration within the Department of Public Works is the “Designated Administrative Agency” or “DAA.”

If a Hiring Entity fails to respond to the DAA’s request for information and/or documents within 20 calendar days, the Freelance Worker shall be entitled to a procedural rebuttable presumption in any subsequent civil action that the Hiring Entity committed the violations alleged in the corresponding complaint filed with the DAA.

If the Freelance Worker prevails in a civil action, in addition to damages provided in the Ordinance, they are entitled to recover all reasonable attorney’s fees and costs, injunctive relief, and other remedies as deemed appropriate by a court.

Employers should carefully read the entire Ordinance, and it would be wise to consult with legal counsel if you are unclear about the requirements of this Ordinance.