California’s Freelance Worker Protection Act (FWPA) empowers businesses and freelancers to collaborate better.
For years, we’ve worked with freelancers and the businesses that hire them and seen how the old way of working led to disputes, ambiguity, arguments over payment, and needless legal fights.
The FFreelance Worker Protection Act clarifies rules for how businesses and freelancers can collaborate. It’s not just a new law to abide by; it’s an opportunity for everyone to adopt best practices to build trust and foster more robust collaboration. Embracing this shift offers a win for everyone.
This article breaks down the Freelance Worker Protection Act and offers 3 actionable steps for freelancers and the businesses that hire them.
Quick Overview of the Freelance Worker Protection Act
The Freelance Worker Protection Act (FWPA) came into force on January 1, 2025, and changed the game for freelancers and businesses who work with freelancers in California
Here’s what the Freelance Worker Protection Act does:
It makes contracts with freelancers mandatory
- Businesses hiring freelancers for work totaling $600 or more annually must provide a written agreement. This contracts must include:
- A description of services to be performed
- Payment terms, including due dates
- Contact information for both parties
It guarantees on-time payment to freelancers
- Hiring businesses must pay freelancers within 30 days of completing services unless the contract says otherwise.
- Late payments trigger financial penalties, which means companies should make a point of paying on time.
- Freelancers have new remedies for companies that do not pay on time.
It protects freelancers against retaliation
- The FWPA safeguards freelancers who assert their rights against retaliation, such as being blocked from future opportunities or facing other punitive actions.
It offers attorney fees for enforcement.
- Freelancers can recover attorney fees and other damages if a hiring business violates the FWPA.
- This clause ensures that pursuing payment or holding businesses accountable isn’t cost-prohibitive for freelancers.
- The law gives freelancers powerful leverage to enforce their right to get paid.
This law encourages fairness and transparency and creates a better foundation for collaboration between businesses and freelancers.
If you see it as an opportunity rather than just a legal hurdle.
How the Freelance Worker Protection Act Attorney Fees Clause Changes the Game
The attorney fees provision in the Freelance Worker Protection Act changes the game.
When freelancers can get attorney fees and damages, businesses should pay attention. Often, the attorney fees to enforce this law will equal or exceed the amounts at issue – no business should want to spend that.
Businesses that don’t follow the FWPA’s rules will be held accountable for far more than they bargained for.
For Businesses: 3 Steps to Build Stronger Freelancer Partnerships Under the Freelance Worker Protection Act
The Freelance Worker Protection Act may seem like extra work, but it leads to fewer disputes and stronger partnerships.
The main point of the Freelance Worker Protection Act is to have written contracts with freelancers. Well-run businesses already do this, as having a good contract creates strong business relationships. However, even those businesses that do could stand to do so with more clarity – and the FWPA offers an opportunity to do that.
Here’s how businesses can align with the law while reaping the benefits:
Step 1: Create Detailed, Written Contracts
Start every project with a contract outlining deliverables, deadlines, payment terms, and both parties’ contact information.
Be as specific as possible to avoid misunderstandings later on.
Pro Tip: Have a standard template contract that contains all key terms.
Step 2: Commit to On-Time Payments
Pay freelancers within the required 30-day window (or the timeframe specified in your contract).
Set reminders or use automated systems to ensure you don’t miss deadlines. Even if you inadvertently miss on-time payments, you can still be liable.
Mistake to Avoid: Do not add conditions for freelancers to get paid. The FWPA prohibits adding conditions for freelancers to get paid on time, and doing this could lead to annoying penalties. Skip that.
Step 3: Communicate Often and Head Off Disputes Early
Don’t wait until it’s time to pay to raise disputes with freelancers. If a project isn’t going as planned, communicate before things turn sour.
Check-in during key milestones to ensure mutual understanding and satisfaction.
Quick Tip: Break larger projects into smaller milestones to reduce payment risk.
For Freelancers: 3 Steps To Use The Freelance Worker Protection Act To Protect Your Rights
The FWPA gives freelancers some legal tools they have never before had.
While freelancers should always commit to understanding and using their rights, it’s often been complicated. The FWPA provides new safeguards that all California freelancers can use. However, as with any legal right, the effectiveness of a tool depends on your knowledge of it.
Here’s how to make the most of your rights under this law:
Step 1: Always Insist On A Written Contract
Before starting any work, ensure you have a signed agreement outlining payment terms, scope, and deadlines.
If a client doesn’t have a contract, have one ready to give to your client. The FWPA creates penalties for businesses that don’t enter a contract when a freelancer requests it. While every company should opt for a contract to make things go smoothly, some don’t.
And it’s a red flag when a business does not want to use a contract – and now the FWPA makes it a legal no-no.
Step 2: Specify Your Deliverables and Payments
If you specify deliverables well, you get paid well and on time.
Document the work you complete and ensure it aligns with the agreed terms. Set objective terms for payment and avoid using vague or ambiguous language.
Use reminders to follow up on late payments and be clear about what needs to get done to get paid.
Avoid this mistake: Don’t rely on informal communications like email and texts to establish deliverables. Opt for clear, written agreements.
Step 3: Address Issues Calmly and Professionally
While the FWPA gives you incredible new legal tools, you still want to communicate calmly and professionally to protect your business relationships.
If payment is delayed or someone breaches the terms, attempt to resolve things professionally and calmly. Also, talking to an attorney who works with creatives will help you use laws like the Freelance Worker Protection Act to their fullest advantage to fix things.
The beauty is that if the calm approach doesn’t work, the Freelance Worker Protection Act gives you some real leverage to make things go your way.
The Freelance Worker Protection Act Gives Clarity For Both Freelancers and Businesses Hiring Them
If you understand the Freelance Worker Protection Act, it creates clarity for freelancers and businesses hiring freelancers.
By setting clear guidelines around contracts and payment timelines, the Freelance Worker Protection Act removes tons of ambiguity. We have seen over and over again how ambiguity leads to disputes and frustration for everyone involved. That would scuttle promising relationships and lead to lost opportunities and revenue for everyone.
Also, this law helps freelancers advocate for themselves and have some proper leverage to get paid and treated fairly.
The more everyone understands this law, the smoother California’s creative economy will run.
