California’s Freelance Worker Protection Act Imposes New Requirements on Employers

California’s new Freelance Worker Protection Act (FWPA), set to take effect on January 1, 2025, establishes new requirements for businesses engaging independent contractors. The law requires businesses to create a written contract when hiring solo independent contractors, defined as individuals or single-person entities providing services valued at $250 or more within a 120-day period. The contract must include essential details such as the scope of work, the rate and method of payment, and the payment due date. If the contract does not specify a due date, payment must be made within 30 days of work completion.

The FWPA also includes several protections for freelancers, prohibiting hiring parties from paying less than the agreed amount, asking for additional work without a new contract, or demanding the assignment of intellectual property rights not specified in the original agreement. These rules aim to protect freelancers from exploitation and ensure they are compensated fairly and promptly. Freelancers can seek enforcement through civil actions, and if violations occur, they may recover penalties, unpaid wages, and legal costs.