The City of Los Angeles Now Requires Written Contracts for Freelance Workers

A new city ordinance in Los Angeles known as the Freelance Worker Protection Ordinance went into effect on July 1, 2023. A written contract is now required for many freelance workers when their work is performed within the City of Los Angeles and they are paid $600 or more by the hiring entity within a calendar year. Any agreement between a hiring entity and freelance worker valued at $600 or more, either by itself or when aggregated with prior written or oral contracts between them in a calendar year, must be in writing and must include:

• The name, address, phone number, and e-mail of the hiring entity and freelance worker;
• An itemization of all services to be provided by the freelance worker, the value of those services, and the rate and method of compensation; and
• The date by which the freelance worker must be paid, or the manner by which such date will be determined.

The hiring entity must provide payment on or before the date specified in the contract, or if the contract does not specify a due date, no later than 30 days after the services are rendered. Written records of the payments, and any other records that demonstrate compliance with the ordinance, must be kept for at least four years by the hiring entity. Hiring entities are also prohibited from retaliating against freelance workers who assert or attempt to assert their rights under the ordinance.

A hiring entity that violates the ordinance can be subject to a civil action and various fines and penalties, including:

• A $250 fine if the freelance worker requested a written contract prior to commencing the work, and the hiring entity refused;
• Damages up to twice the amount that remains unpaid under the contract if the hiring entity fails to timely pay for the services;
• The greater of the value of the contract or the work performed for any other violations of the ordinance; and
• The freelance worker may be entitled to attorneys’ fees and costs.

Some freelance workers are excluded from the ordinance, including those already required by law to have a written agreement when providing services for compensation, those that agree to perform work for no pay, and those that are already employees of the hiring entity. Hiring entities that hire app-based transportation and delivery drivers to provide prearranged services are also excluded from the ordinance.

Although the ordinance is limited to the City of Los Angeles, it represents yet another development in the constantly evolving legal protections afforded to freelance workers and independent contractors. Hiring entities that retain freelance workers within the City of Los Angeles must take note of these new requirements and make efforts to comply with them to avoid monetary penalties and potential legal action.