N.Y. State Tries to Help Frustrated Freelancers Get Paid

Richard Greenwald

A subway ad from the Freelancers Union's campaign for freelance and independent contractor labor rights.

More and more Americans are freelancing today, as traditional 9-5 jobs seem to disappear faster than ice melting in the hot summer sun. Freelance (or contract) workers find themselves completely unprotected by current labor laws, which were designed for 9-5 workers. (Read my story in the current issue of In These Times about America’s budding freelance economy.)

The Freelancers Union (FU), which has over 90,000 New York City members (and another 50,000 nationwide) has been trying to change New York state law to better reflect current employment trends.

Right now, if you work a traditional job, receive a W-2, and are owed wages, you can file a claim with the Department of Labor. If you are a freelancer, however, your only remedy to collect back wages is to sue or walk away. Chances are if you are freelancing, you have neither the money or time to sue. So many are forced to walk away, unpaid.

The FU has defined its four big issues as Affordable Health Insurance, Fair Taxation, Unemployment Protection, and Unpaid Wages.” Last year FU was able to get New York state to reduce the state’s unincorporated business tax, which disproportionally hurt freelancers. Now the union is tackling unpaid wages.

Starting in April of this year, FU took out a series of ads on the New York City subway system. The ads brought the issue to public attention, and in early June, State Senator Dan Squadron introduced a bill in the State Senate. This week, Assembly Speaker Sheldon Silver joined Squadron as a sponsor of the legislation. Squadron argues:

Since the original enactment of the labor law regulations the workforce composition of New York State has changed significantly. The modern economy has led to the rise of individual workers considered independent contractors” or freelancers.” An independent contractor, as defined by this legislation, is a sole proprietor who is not an employee and who is hired or retained by a client for an amount equal to or greater than six hundred dollars (the threshold for which a company or person must provide a form 1099 to the U.S. Internal Revenue Service).

These people often participate in work alongside traditional employees, yet they are not afforded the same protections under the law as their traditionally employed counterparts. They are especially vulnerable because their compensation is not guaranteed under the labor law, and their main forum for relief is to go to small claims court.

This bill seeks to correct that by amending the labor law to extend protection to this population of workers. A recent survey of independent contractors revealed that they spent 17,000 hours pursuing $3 million dollars in owed compensation. This indicates not only the disproportionate burden placed on these individuals to collect payments that are rightfully theirs, but also illustrates how much productivity is lost because independent contractors are forced to spend time pursuing compensation when they could be performing valuable and constructive work activity.

This bill would remedy the invisible space that freelancers find themselves in as they are ineligible for most employment based benefits or protections. We are living in a system that was for the most part created nearly 50 years ago to deal with the issues of an industrial society. We are now living in a post-industrial world and need legislation that recognizes the new reality.

Sara Howowitz, FU’s executive Director, was quoted in a New York Daily News article this April saying: New York State and New York City can lead the way for the rest of the country [on freelancer rights].” 

In fact, New York State has been leading the way in labor reform since the early 20th century. Following the 1911 Triangle Fire, the state created the Factory Investigating Committee, which rewrote New York’s labor laws making it the most progressive state in the nation. Now, the state has a chance to continue this tradition.

But this bill and others supporting labor reforms are stalled in the state legislature as they deal with a state budget that is now over three months late. This is crunch time in the state legislature. If any serious labor reform is to be done this session, it needs to be done in the next few days before the legislature breaks for the July 4th holiday. We will see if the Empire State continues its tradition or not…

Richard Greenwald is a labor historian and social critic. . His essays have appeared in In These Times, The Progressive, The Wall Street Journal among others. He is currently writing a book on the rise of freelancing and is co-editing a book on the future of work for The New Press, which features essays from the county’s leading labor scholars and public intellectuals.
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