Freelance Worker Protection Act Creates New Rights for Workers, New Responsibilities for Employers

California has long been a trailblazer in labor rights, and its laws continue to evolve to better support workers. One of the more recent developments is the Freelance Worker Protection Act, which aims to create a more equitable environment for freelancers working in California. The new law was introduced by State Senator Scott Weiner of San Francisco as California Senate Bill 988 (SB 988). The bill was signed into law in September 2024 and applies to contracts entered into or renewed on or after January 1, 2025.

Learn about the new law below. If you are a freelance worker or California employer looking to understand rights and responsibilities under the Act, contact Richard Koss to share your concerns with a skilled and experienced San Francisco employment law attorney.

Purpose of the Law

Freelance workers make up a significant portion of the modern workforce. Whether it’s through content creation, design, writing, or other independent contracting work, freelancers have become essential to a variety of industries. However, freelancers often face challenges such as delayed payments, unclear contract terms, and a lack of legal protection compared to traditional employees. The Freelance Worker Protection Act seeks to address these issues and provide greater security for California’s freelancers.

Key Features of the Freelance Worker Protection Act

1. Timely Payment Requirements

One of the most important provisions of SB 988 is its requirement for timely payment. Freelancers now have legal protections requiring clients to pay them promptly for services rendered. Under the law, clients are required to pay freelancers within 30 days of receiving the completed work, unless otherwise agreed upon in the contract. If payment is not made within this period, freelancers are entitled to interest on the overdue amount, helping to ensure that businesses do not take advantage of freelancers’ time and effort.

2. Written Contracts

The Freelance Worker Protection Act emphasizes the importance of clear and concise agreements between freelancers and businesses. Freelancers and clients are now encouraged, if not required, to establish written contracts for any work agreement that outlines the scope of work, payment terms, deadlines, and expectations. These contracts help reduce confusion and provide a legal foundation in case of disputes. While not always required for smaller, one-time engagements, formal contracts are strongly recommended under this new law for projects of significant scope or duration.

3. Prohibition on Misclassification

Misclassifying a worker as an independent contractor instead of an employee is a problem that has plagued many industries. Under SB 988, businesses must ensure that their freelancers are classified correctly. Freelancers who should be employees under state law—based on the nature of their work—must be offered employee benefits and protections. This provision helps combat the growing trend of misclassification, where businesses attempt to avoid the costs associated with full-time employees by improperly labeling workers as independent contractors. True freelance workers should be considered independent contractors, although the three-part “ABC” test still applies to determining if a worker is an employee or an independent contractor.

4. Non-Retaliation Protections

Retaliation against workers who assert their rights is a concern for many freelancers. The Freelance Worker Protection Act includes provisions to protect workers from discrimination or retaliation by clients or employers who attempt to punish or penalize freelancers for requesting payment or questioning a misclassification. If a business retaliates against a freelancer for asserting their rights under SB 988, the freelancer may be entitled to additional damages and legal remedies.

How Freelancers Benefit from SB 988

For freelancers in California, the Freelance Worker Protection Act offers much-needed peace of mind. It ensures that they are compensated fairly and promptly for their work, that the terms of their agreements are clearly defined, and that they have legal recourse if things go wrong. Many freelancers previously struggled with vague contracts, nonpayment, and unfair treatment by businesses—issues that the Freelance Worker Protection Act directly addresses.

Freelancers can now confidently pursue work with the assurance that they have legal protections backing them up. By requiring written contracts and timely payments, SB 988 helps foster a more professional, transparent, and fair freelance marketplace.

What Employers Need to Know About SB 988

While the Freelance Worker Protection Act benefits freelancers, it’s equally important for employers to be aware of their new responsibilities. Employers who hire freelancers must ensure they’re following the law and paying freelancers on time.

Here are some key takeaways for employers:

• Review contracts: Employers should ensure that any freelancer they hire has a clear, written contract that outlines payment terms, deliverables, deadlines, and other important details.

• Pay on time: Employers need to make timely payments to freelancers, as stipulated in SB 988. Failing to do so could result in legal action and additional financial consequences.

• Correct misclassification: Employers must avoid misclassifying workers as independent contractors if they should legally be employees, according to California’s labor laws.

• Understand retaliation risks: Employers should not retaliate against freelancers who assert their rights under the law, as doing so could result in legal ramifications.

Contact Attorney Richard Koss for Help With Employment Law in San Francisco

The Freelance Worker Protection Act marks an important step forward for freelancers in California. With clear guidelines for timely payments, written contracts, and protection from misclassification and retaliation, SB 988 helps create a more secure and equitable environment for freelancers. As a business owner or freelancer in California, it’s important to understand how these protections can affect your rights and obligations. If you need assistance with compliance or have questions about how these changes impact your business or freelance career, reaching out to an experienced employment law attorney can help you navigate these important legal changes.

If you have any questions regarding the Freelance Worker Protection Act or need advice on your freelance or employment agreements, feel free to contact Richard Koss, your trusted employment law advisor in the San Francisco Bay Area.

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