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As of January 1, 2025, California employers working with independent contractors must comply with the state’s new Freelance Worker Protection Act (FWPA), introduced through Senate Bill 988. This legislation was designed to provide greater protections to freelance workers, addressing long-standing concerns about lack of payment, contract clarity, and retaliatory practices. For HR professionals and employers throughout California, this new law represents a crucial compliance issue that requires immediate attention.
One of the central elements of the FWPA is the requirement for a written contract for any freelance engagement valued at $250 or more. This contract must clearly outline the names and mailing addresses of both parties, a detailed description of the services to be provided, the agreed-upon compensation or a method for calculating it, the payment due date (or how it will be determined), and the expected date by which the freelance worker should submit an invoice. Employers must keep these records on file for at least four years, which could be essential in the event of a dispute.
Timely payment is another core requirement under the FWPA. If the contract includes a specified payment date, employers must honor it. If no date is listed, the law mandates that payment be made no later than 30 days after the freelance work is completed. This provision eliminates the common practice of delayed payments, which has long been a frustration for freelance professionals.
The FWPA also includes a strict prohibition against retaliation. Employers cannot discriminate or retaliate against a freelance worker who exercises their rights under the law—such as by asserting a claim, participating in an investigation, or even simply requesting a written contract. Any such action could lead to significant legal consequences.
Another key provision of the law protects freelancers from being pressured into renegotiating terms after work has begun. Once services are underway, a hiring entity may not require a freelancer to accept reduced compensation or to offer more services or intellectual property than originally agreed to in exchange for timely payment. This measure seeks to ensure fairness and maintain the integrity of freelance agreements.
Enforcement of the FWPA gives freelancers the right to file lawsuits against businesses that violate its provisions. If a contract was not provided after the freelancer requested one, they may recover up to $1,000. If payment is not made on time, the worker may be entitled to double the unpaid amount or damages equal to the full value of the contract—whichever is greater.
To comply with the FWPA, California employers should take several important steps. First, review any freelance engagements to determine whether the value meets or exceeds the $250 threshold. Next, ensure that all contracts include the necessary elements and that payment protocols are clearly defined and followed. Companies should establish recordkeeping procedures to retain contracts for the required four-year period and train managers or departments that work with freelancers on how to follow the new law.
The Freelance Worker Protection Act represents a major step toward ensuring freelance professionals receive fair treatment and timely compensation. California employers should act quickly to update internal processes, documentation standards, and training programs to avoid penalties and build stronger, more compliant relationships with independent contractors. As the freelance economy continues to grow, businesses that adapt to these changes will not only stay legally compliant but also build trust and credibility with a vital segment of the workforce.
(Centralize HR, 2025)
