California Freelancer Protection Act: What you need to know
THE CALIFORNIA FREELANCE WORKER PROTECTION ACT
Understanding California’s New Freelance Worker Protection Act: What Freelancers and Businesses Need to Know
Effective January 1, 2025, California’s Freelance Worker Protection Act (FWPA) provides protections for independent contractors (aka freelance workers) and sets clear requirements for businesses hiring freelancers. Signed by Governor Newsom on September 28, 2024, this landmark legislation aims to establish fairness and transparency in freelance work arrangements.
Here’s a breakdown of what the law means for California-based freelancers and California-based businesses (known as a “hiring party”).
Who Does the FWPA Apply To?
The FWPA applies to California-based individuals or private companies (“hiring party”) hiring freelancers to provide “professional services” in exchange for $250 or more. This $250 threshold can be met through a single contract or the aggregate value of all contracts between the parties within a 120-day period.
Exemptions: The FWPA does not apply to federal, state, or local governments, foreign governments, or individuals hiring freelancers for personal or family-related services.
Professional Services Include:
Marketing
Human resources
Graphic design
Photography and videography
Freelance writing, editing, and translating
Fine artistry
Content creation and narration
And more!
Key Requirements of the FWPA
The FWPA has four main requirements for every California-based “hiring party” who hires a freelance worker (aka independent contractor). These are:
1.) Written Contracts Are Required:
For engagements worth $250 or more, hiring parties must provide a written agreement before work begins.
The contract must include:
Names and mailing addresses of both parties
Itemized services to be provided
Total value of the services
Rate and method of compensation
Payment due date or mechanism for determining it
Deadline for submitting completed services (if applicable)
2.) Timely Payments to Freelancer:
Freelancers must be paid on or before the date specified in the contract.
If the contract doesn’t specify a payment date, payment must be made within 30 days of the completion of services.
Businesses cannot condition timely payment on a freelancer accepting reduced compensation.
3.) Recordkeeping:
Hiring parties must retain written contracts for at least four years.
Failure to maintain records can result in a presumption that the freelancer’s presented terms are accurate.
4.) Anti-Discrimination Protections:
Freelancers are protected from harassment, discrimination, intimidation, or retaliation for asserting their rights under the FWPA.
Consequences of Non-Compliance
Freelancers have robust enforcement options under the FWPA, including the right to file lawsuits against hiring parties who violate the law. Potential remedies include:
Damages: Up to twice the unpaid amount.
Statutory Penalties: An additional $1,000 if a requested written contract was refused by the hiring party before the freelancer began work (thus violating this Act).
Legal Costs: Reasonable attorney’s fees and court costs.
Injunctive Relief: To prevent further violations.
Waiver: And a waiver of any provision that is void or unenforceable as it goes against public policy.
Practical Tips for Freelancers and Businesses
For Freelancers (who work with CA-based businesses):
If you’re a freelancer who works with CA-based businesses, here are some practical tips for you:
Always request a written contract before starting any work valued at $250 or more.
If you’re a freelancer working outside California, consider including a choice of law clause in your contracts to clarify which state laws will govern the agreement (hint, hint…you might want California law to apply to your agreement so this law applies and not your home state law if your home state doesn’t provide the same protections, obvi- pros/cons to this so speak to a lawyer).
Maintain copies of your contracts and records of completed services.
Know your rights under the FWPA, including the right to timely payment and protection from retaliation.
IMO you can use this law to your advantage to negotiate and enforce payment terms. Here’s how you can make it work for you:
Push for Reasonable Payment Deadlines:
If the payment date in the contract feels unreasonably far out, consider suggesting a change like this: “Under the new California Freelance Worker Protection Act, payment must be made within 30 days unless otherwise stated in the contract. Can we adjust the payment date to X?” This sets a fair standard while showing you’re informed about your rights. The “unless otherwise stated” might cause you problems. And, thus, it’s worth noting that leaving the payment date unspecified in the contract can work to your advantage. In such cases, the law defaults to a 30-day payment period, which California considers reasonable. Use this as leverage to ensure you’re not left waiting too long for your payment.Follow Up on Late Payments Assertively:
If a payment is overdue, you can send a professional reminder like:
“Per our contract, payment was due on [date]. Under the FWPA, freelancers are entitled to timely payment, and if payment is delayed, I have the right to seek double damages. Please submit payment within [reasonable timeframe] to avoid further action.” This communicates urgency without being confrontational.Escalate When Necessary:
If the client still doesn’t pay, don’t be afraid to reference the law and small claims court:
“As outlined in the FWPA, I’m entitled to double the unpaid amount for late payment. If I don’t receive payment by [specific date], I will need to pursue this matter in small claims court, where I feel confident about the outcome. I’d prefer to resolve this amicably, so I appreciate your prompt attention.”
For Businesses (based on California):
If you’re a business based in California who hires freelancers, here are some practical tips for you:
Review and update your policies for hiring freelancers to ensure compliance with the FWPA.
Avoid the default 30-day payment rule by explicitly stating the payment due date in your contracts. For example: “Payment will be made 45 days after completion of services.”
Review any choice of law clause in contracts with freelancers who reside outside of California. Consider specifying which state’s law will govern the contract (hint: if it’s CA law, then this law will apply).
Maintain strong recordkeeping for at least four years. Create a centralized folder (physical or digital) to store signed freelancer contracts.
Understand (and train your staff) the importance of timely payment (to avoid the consequences like double damages) and anti-discrimination practices should a freelancer request a written contract.
Why This Matters
The FWPA marks a significant step forward in protecting the rights of freelancers and creating accountability for hiring parties. New York has implemented a very similar law as well (it applies to contracts exceeding $800).
For freelancers, the FWPA empowers them to demand clarity and security in their working relationships.
For businesses, compliance isn’t just about avoiding penalties—it’s about fostering trust and professionalism in their dealings with freelance talent.
By understanding and adhering to the FWPA, both freelancers and businesses can build stronger, more equitable partnerships.
Disclaimer: This is not legal advice, but provided for educational and information purposes only.
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