California Enacts its Own Freelance Worker Protection Law

Modeled, in part, on New York’s freelance worker protection law, California’s new law takes effect on January 1, 2025.  Under this new California law, businesses engaging the services of an individual independent contractor or a company owned and operated by a single independent contractor for over $250 will need to comply with certain requirements for the contractor engagement.  Unlike New York’s equivalent, California’s version is limited to those contractors providing professional services.  The reach of professional services is intended to be focused because this new law incorporates the same definition of professional services that serves as an exemption from California’s AB 5 (ABC test independent contractor legislation).  Professional services include trades like travel agents, graphic design, human resources consultation, and estheticians; categories related to entertainment production could be photographers, fine artists, and gig writers/editors.  

Businesses working with covered professional services independent contractors are required to have written contracts covering, at a minimum, the name and mailing address of each party, a description of services to be provided by the contractor, a due date for payment of services, and an invoice deadline  Hiring customers are also prohibited from retaliation against contractors for exercising rights under this law, and aggrieved contractors can sue in court for violations and recover attorneys’ fees and costs as well as an additional $1,000 penalty for a hiring customer’s refusal to sign a written contract, double damages for any amounts paid late, and additional damages equal to the contract value for any other violations (like retaliation).