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SB-988 Freelance Worker Protection Act.(2023-2024)

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Date Published: 01/30/2024 09:00 PM
SB988:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 988

Introduced by Senator Wiener

January 30, 2024

An act to add Division 7 (commencing with Section 10500) to the Labor Code, relating to independent contractors.


LEGISLATIVE COUNSEL'S DIGEST


SB 988, as introduced, Wiener. Freelance Worker Protection Act.
Existing law generally regulates employment and, with certain exceptions, requires a 3-part test, commonly known as the “ABC” test, to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission. Existing law authorizes the Division of Labor Standards Enforcement, the head of which is the Labor Commissioner, to enforce the Labor Code and all labor laws of the state the enforcement of which is not specifically vested in any other officer, board, or commission.
This bill would impose minimum requirements, commencing January 1, 2025, relating to contracts between a hiring party and a freelance worker, defined as a person, as specified, that is hired or retained as an independent contractor by a hiring party to provide professional services in exchange for an amount equal to or greater than $250, as specified. Specifically, the bill would require a hiring entity to pay a freelance worker the compensation specified by a contract for professional services on or before the date specified by the contract or, if the contract does not specify a date, no later than 30 days after completion of the freelance worker’s services. The bill would require a contract between a hiring party and a freelance worker to be in writing and would require a hiring party to retain a copy of the contract for no less than 6 years. The bill would prohibit a hiring party from discriminating or taking adverse action against a freelance worker for taking specified actions relating to the enforcement of these provisions. The bill would authorize an aggrieved freelance worker, the Labor Commissioner, or a public prosecutor to bring a civil action to enforce these provisions, as specified.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Division 7 (commencing with Section 10500) is added to the Labor Code, immediately following Division 6, to read:

DIVISION 7. Independent Contractors

10500.
 This division shall be known, and may be cited, as the Freelance Worker Protection Act.

10501.
 For purposes of this division, the following definitions apply:
(a) “Freelance worker” means 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 an independent contractor by a hiring party to provide professional services in exchange for an amount equal to or greater than two hundred and fifty dollars ($250), either by itself or when aggregated with all contracts for services between the same hiring party and independent contractor during the immediately preceding 120 days.
(b) “Hiring party” means a person who retains a freelance worker to provide professional services, except any of the following:
(1) The United States government.
(2) The State of California or any subdivision thereof.
(3) A foreign government.
(c) “Professional services” has the same meaning as paragraph (2) of subdivision (b) of Section 2778.
(d) “Public prosecutor” has the same meaning as Section 180.

10502.
 (a) Except as otherwise provided by law, a hiring party shall pay a freelance worker the compensation specified by a contract for professional services:
(1) On or before the date compensation is due pursuant to the contract.
(2) If the contract does not specify when the hiring party shall pay, no later than 30 days after the completion of the freelance worker’s services under the contract.
(b) Once a freelance worker has commenced performance of services under a contract, a hiring party shall not require as a condition of timely payment that the freelance worker accept less compensation than the amount of compensation specified by the contract.

10503.
 (a) Whenever a hiring party retains the services of a freelance worker, the contract between the hiring party and the freelance worker shall be in writing. The hiring party shall furnish a copy of the written contract, either physically or electronically, to the freelance worker. The hiring party shall retain the contract for no less than six years.
(b) The contract shall include, at minimum, all of the following information:
(1) The name and mailing address of each party.
(2) An itemized list of all services to be provided by the freelance worker, including the value of those services and the rate and method of compensation.
(3) The date on which the hiring party shall pay the contracted compensation or the mechanism by which the date shall be determined.
(4) The date by which a freelance worker shall submit a list of services rendered under the contract to the hiring party to meet the hiring party’s internal processing deadlines for purposes of timely payment of compensation.

10504.
 A waiver of any provision in this division shall be deemed contrary to public policy and is void and unenforceable.

10505.
 A hiring entity shall not discriminate or take any adverse action against a freelance worker that penalizes a freelance worker for, or is reasonably likely to deter a freelance worker from, taking any of the following actions:
(a) Opposing any practice prohibited by this division.
(b) Participating in proceedings related to the enforcement of this division.
(c) Seeking to enforce rights provided by this division.
(d) Otherwise asserting or attempting to assert rights provided by this division.

10506.
 (a) An aggrieved freelance worker, the Labor Commissioner, or a public prosecutor may bring a civil action to enforce this division.
(b) A prevailing plaintiff in an action alleging a violation of this division is entitled to reasonable attorney’s fees and costs, injunctive relief, and any other remedies deemed appropriate by the court. Damages shall be awarded to an aggrieved freelance worker as follows:
(1) If the freelance worker requested a written contact prior to commencing work under the contract and the hiring entity refused in violation of Section 10503, the freelance worker shall be awarded an additional one thousand dollars ($1,000).
(2) If the hiring entity failed to pay the freelance worker the contracted compensation by the time required under Section 10502, the freelance worker shall be awarded damages up to twice the amount that remained unpaid at the time payment was due.
(3) If the hiring entity violates any other provision of this division, the freelance worker shall be awarded damages equal to the value of the contract or the work performed, whichever is greater.

10507.
 This division applies only to contracts entered into or renewed on or after January 1, 2025.