Skip to content

New York City Sets an Example with New Local Labor Laws

Until recently, human resources managers and labor lawyers worried primarily about federal employment laws. State employment laws—with the notable exception of California’s—were mostly duplicative of federal laws. As for local labor laws, few of them had much effect on employers that were not actually doing business with the city government. That is quickly changing.

Responding to their more liberal and younger residents, city governments are considering progressive labor laws that would create new rights for employees that exceed those existing currently under federal law. New York City—where I have been recently spending considerable time—is one city that has been especially active in enacting employee-friendly labor laws. Like some other major cities, New York City has made it illegal for employers to ask about criminal records of job applicants before making a job offer, or from checking applicants’ credit histories to make employment decisions. New York City has also joined some other major cities in requiring most employers to provide their employees with some paid sick leave.

But what makes the Big Apple a real trendsetter in local labor laws is the new “Freelance Worker” law that the New York City Council passed last week. This law, which is expected to be signed by Mayor Bill DeBlasio and go into effect within 180 days after signing, protects employees in the “gig economy” from getting “stiffed” by a “hiring party.” (No doubt, the drafters recognized the legal difficulty of referring to companies as “employers” in this particular context.) The law requires a written contract for any job paying more than $800 and requires payment for services within 30 days, unless the contract provides for a different schedule. Workers who prevail under the law can recover contract damages, “double damages,” and attorney’s fees, and the trier of fact can impose an additional civil penalty of up to $25,000 on any hiring party that has engaged in a pattern or practice of violations under the law.

While some in the business community may be quick to criticize this new law as just another example of New York City trying to out-liberal San Francisco, I believe that there is much to commend in this new law. By providing some basic protections to contingent workers, New York City’s “Freelance Worker” law provides some legitimacy to a worker classification that is not an employee but may not neatly meet the tests for independent contractor. The Department of Labor has so far been unwilling to consider moving from this rigid dichotomy, but perhaps it will be forced to reconsider as more laws protecting non-employees are passed.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.